Critical Issues Pertaining to the Code of Practice for ... · Critical Issues Pertaining to the...

Hubert EichmannBernhard Saupe

Maria Schwarz-Wölzl

Critical Issues Pertaining to theCode of Practice for Global E-work

D11 - Impact AnalysisVIP – Voluntary Industrial Code of Practice for

IST-enabled Cross-border Work Arrangements

(IST-2000-25463)

Centre for Social Innovation

Vienna, July 2002

2

Hubert Eichmann, Bernhard Saupe, Maria Schwarz-Wölzl

Centre for Social Innovation (CSI), Vienna

Critical Issues Pertaining to the Code of Practice for Global E-work

Final version

Vienna, July 2002

D 11 – Impact Analysis

VIP – Voluntary Industrial Code of Practice for

IST-enabled Cross-border Work Arrangements

(IST-2000-25463)

3

C O N T E N T

Content................................................................................................................................................................3

Summary.............................................................................................................................................................5

Part A. What is e-work and how widespread is it? 9

A.1 What is e-work? .............................................................................................9

A.2 Who should be covered by a voluntary code for global e-work? ....................13

A.3 Empirical findings on e-work in industrialised countries.................................17A.3.1 Empirical findings on remote, controlled e-work in industrialised countries.............................17A.3.2 Empirical findings on collaborative e-work in industrialised countries......................................22

A.4 Findings on e-work in developing/newly developed countries........................23A.4.1 Which developing countries are participating in the digital economy?......................................25

Part B. Relevant issues in global e-work ......................................................................................................29

B.1 Teleworking conditions.................................................................................29B.1.1 Socio-economic characteristics of teleworkers............................................................................29

B.1.2 Crucial aspects of individualised forms of remote work.............................................................31B.1.3 Existing regulatory frameworks for individualised teleworking in Europe................................34

B.1.4 Guidelines for Telework in Europe...............................................................................................38

B.2 Quality of work and employment (in flexible work systems)...........................41B.2.1 Increasing flexibility and intensification of work........................................................................42B.2.2 Selected aspects of career and employment security...................................................................46

B.2.3 Selected aspects of occupational health and safety......................................................................49

B.2.4 Selected aspects of reconciling working and non-working life...................................................54B.2.5 Some formulations from existing codes of conduct.....................................................................58

B.3 Electronic Monitoring and Data Protection ....................................................60B.3.1 Information available through Electronic Monitoring.................................................................60

B.3.2 Relevant legislation.......................................................................................................................61B.3.3 Actual use of Electronic Monitoring.............................................................................................64

B.3.4 Reasons for and effects of Electronic Monitoring........................................................................65B.3.5 Ethical discussion..........................................................................................................................69

B.3.6 Some formulations from existing codes of conduct.....................................................................70

B.4 Protection of Intellectual Property Rights in an age of computers ..................72B.4.1 Data security and IPR sharing in the context of e-work..............................................................72

B.4.2 Relevant legislation.......................................................................................................................75B.4.3 Some formulations from existing codes of conduct.....................................................................79

B.5 Health implications of Display Screen Equipment .........................................80

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B.5.1 Health problems connected to work with DSE by kind and frequency.......................................80

B.5.2 Ergonomic and usability-related principles and recommandations.............................................82B.5.3 Relevant legislation.......................................................................................................................84

B.5.4 Diffusion and effect of ergonomic and usability-related standards regarding DSE...................86B.5.5 Some formulations from existing codes of conduct.....................................................................89

B.6 Virtual collaboration and virtual teams ..........................................................90B.6.1 Types of virtual teams...................................................................................................................92

B.6.2 Barriers and success factors for virtual teams..............................................................................98B.6.3 Barriers and success factors for cross-cultural virtual teams.................................................... 100

B.7 IT-Training .................................................................................................107B.7.1 Quantitative evidence on IT-Training........................................................................................ 107

B.7.2 IT Training methods................................................................................................................... 112

B.7.3 Ethical issues related to IT-Training.......................................................................................... 113B.7.4 Some formulations from existing codes of conduct.................................................................. 116

B.8 Cross-cultural diversity in the light of business ethics..................................117B.8.1 Definition of culture................................................................................................................... 117

B.8.2 Cultural variation........................................................................................................................ 119B.8.3 Managing cross-cultural business ethics................................................................................... 127

B.8.4. UNESCO’s regulation on cultural diversity............................................................................. 129

B.8.5 Some formulations from existing codes of conduct.................................................................. 130

B.9 Corporate citizenship with a focus on the digital divide................................131B.9.1 General aspects of corporate citizenship................................................................................... 131B.9.2 Digital divide and initiatives for digital inclusion..................................................................... 132

B.9.3 Some formulations from existing codes of conduct.................................................................. 140

B.10 Core labour standards with focus on collective bargaining ......................141B.10.1 Union rights - the first social pillar of the global economy.................................................... 142B.10.2 Basic labour standards in voluntary codes of conduct............................................................ 145

B.10.3 The role of trade unions with respect to codes of conduct...................................................... 152B.10.4 Some formulations from existing codes of conduct................................................................ 155

List of Interviews .......................................................................................................................................... 157

References...................................................................................................................................................... 158

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S U M M A R Y

The development and diffusion of computer-related information and communication

technologies has had an enormous impact on the organisation of business and em-

ployment relationships. Not only have global business contacts increased in numbers

and size to a large extent, but also completely new kinds of work arrangements have

developed, consisting of virtual co-operation between spatially dispersed co-workers

and company departments. In social science research, these arrangements have

commonly been termed either “e-work” – referring to co-operation between remote

individuals or departments – or “e-collaboration”, referring to co-operation in virtual

teams.

Since employment legislation is only just beginning to catch up with specific aspects of

e-work and e-collaboration, the VIP project aims at developing a Code of Practice co-

vering the most important e-work-related issues and making a step towards common

standards for global e-work arrangements. The most important aspects singled out

within the project and presented in the main chapters of the current code draft are:

• e-work conditions,

• data protection, security and integrity,

• work technologies and tools,

• contribution to progress in countries of operation and

• environment.

In this report, we present material on issues pertaining to these aspects including

• findings from international social scientific research,

• findings concerning existing legislation and its limits,

• arguments from ethical discussions,

• selected case studies,

• useful formulations from existing codes, and

• results of qualitative interviews CSI conducted with experts and e-workers regard-

ing their personal viewpoints and experiences.

This paper consists of two parts. In Part A , acting as a starting point, we develop a

more detailed definition of e-work and e-collaboration, contrasting them with similar

theoretical concepts like “telework” or “online-work”, and then present general findings

on the frequency of e-work and e-collaboration arrangements in different parts of the

world.

The report continues with Part B , in which we discuss relevant e-work issues following

the structure shown in the figure below, that is, specifically addressing the items in the

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draft version of the code of conduct for global e-work. Part B consists of 10 chapters.

Although any one chapter refers to several others, the single chapters are not neces-

sarily presented according to any logical sequence. Thus, to make this report user-

friendly, any chapter in Part B can be read without details being required from any

other, according to individual interests.

Within this report, we do not discuss issues in the context of environmental control that

are also part of the draft code. This is due to the existence of a large amount of litera-

ture dealing with ecological and sustainability matters in both the national and interna-

tional perspective.

Figure S. 1 Structure of the code for gl obal e-work (5 chapters) and Part B of thi s

report (10 chapter s)

Main issues / relevant

discussions

National and /

or cross-

border issue

Some relevant

initiatives

1. E-working conditions

• B.1 Teleworking conditions

• B.2 Quality of work and em-

ployment

• telework and e-

work conditions

• knowledge work

conditions

• both

• both

• e.g. guide-

lines for tele-

work in

Europe

2. Data protection

• B.3 Electronic Monitoring

• B.4 Protection of IPR

• surveillance and

privacy at work

• both • EU directives,

online rights

initiatives

3. Working technologies

• B.5 Usability of workplace

• B.6 Virtual collaboration

• B.7 IT-Training

• management of

tele-collaboration

• both • EU directive,

ISO and

other stan-

dards, online

associations

4. Host country progress

• B.8 Cross-cultural diversity

• B.9 Digital divide

• B.10 Core labour rights

• CSR on societal,

technological,

business devel-

opment

• cross-bor-

der

• many, e.g. on

IT issues like

digital divide

5. Environmental control • sustainability • both • many, e.g.

www.gesi.org

In chapter B.1, individualised modes of remote work outside a company’s office prem-

ises are examined – i.e. full-time or occasional home-based telework. After an empiri-

cal overview of the socio-economic characteristics of teleworkers, typical phenomena

and problems arising from individualised remote work are identified. The chapter con-

7

tinues with a summary of the discussion on legal frameworks for individualised tele-

work, closing with case studies and a good model code of practice for telework.

E-work can be divided into individualised and office-based modes. Whereas in chapter

B.1 crucial matters involved in individualised forms of telework are investigated, it is

clear that office-based e-workers share some of the characteristics of white-collar

workers or knowledge workers in general. Hence, chapter B.2 gives an overview of the

most relevant aspects of employment and job quality with a focus on knowledge work-

ers.

Chapter B.3 is devoted to data protection and privacy in the context of the emerging

possibilities of electronic performance monitoring and work surveillance. We outline

what kinds of data maybe obtained using the present technical possibilities, then re-

view evidence concerning the actual use of these possibilities, what reasons employ-

ers have for using them and what effects electronic performance monitoring has on

employee productivity and well-being. We furthermore sketch the legal situation with

regard to personal data protection in different parts of the world and review ethical dis-

cussions regarding the relationship between monitoring needs and individual privacy

rights.

Chapter B.4 addresses the possibility of claiming intellectual property rights on work

outcomes in the context of computer-related products and online data exchange. We

explore what measures may be taken to render corporate data traffic secure and how

IPRs on computer-related products may be properly shared between developers and

their companies. We sketch relevant national and international legislation and review

existing discursive and case-study-based material.

In Chapter B.5, we examine the potential impact of working at computer workstations

upon the health and well-being of e-workers. We report findings on the quantity of

health problems connected with computer work and on both behavioural and technical

factors contributing to them. We also give a sample ergonomic principles and guide-

lines that have been developed in response to these problems and then provide a

summary of findings concerning both the diffusion and the effects of such principles.

The chapter is completed by legislation reviews and case-study material.

Within chapter B.6, following a general assessment of virtual collaboration, teamwork

in virtual environments is examined. First, obstacles and success factors for virtual

teams in general, and second, aspects of virtual teams that collaborate over national

borders and across different cultures are discussed.

8

Chapter B.7 deals with IT training as a central prerequisite for individual and corporate

success in a business world largely founded on computer technology. We review find-

ings concerning the present IT training market in different national contexts, future

prospects, employers’ reasons for investing in IT training and returns on training in-

vestments. We furthermore discuss related ethical issues including the repayment of

training costs after the end of an employment relationship and the applicability of

training content beyond an employee’s current position.

When operating worldwide, companies need to understand cross-cultural diversity. The

central concern of chapter B.8 is to describe how different cultures can influence busi-

ness behaviour. For example, promoting implementation of codes of conduct that do

not seriously respect different cultural perspectives risks widening misunderstandings

and setting the stage for hostilities that could otherwise have been avoided.

Businesses as corporate citizens play a major role in the economic, social and cultural

development of industrialised and developing countries alike. Chapter B.9 does not

intend to give a detailed picture of the activities companies are involved in toward so-

cietal development in all areas of interest. Instead, we refer to one specific aspect of

corporate responsibility in the context of global e-work, namely the contribution toward

reducing the digital divide between industrialised and developing countries.

Whereas in chapters B.1 to B.9 topics related to e-work in the context of the global

knowledge-based economy are treated, chapter B.10 discusses fundamental worker

rights such as collective bargaining. Although issues such as forced labour or child

labour are hardly relevant for the target group of white-collar workers whom the global

code for e-work addresses, basic labour rights are, nevertheless, of central importance

for working conditions in the knowledge-based economy.

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P A R T A . W H A T I S E - W O R K A N D H O W W I D E S P R E A D I S I T ?

Within this chapter we first want to clarify what e-work is all about as compared to con-

cepts such as telework, online work, knowledge-based work or even white collar work.

Second, target groups for e-work, that is, those to whom a global code for e-work

would apply, are defined. Following this, empirical overviews on the extent of e-work in

industrialised countries as well as in developing or newly developed countries are pre-

sented. The empirical evidence on the diffusion of e-work is nonetheless still very

fragmentary, and this is especially true for developing countries. The most relevant

source of data for developing countries used in this report is the World Employment

Report 2001 by the ILO. Part A of this report serves as a theoretical and empirical ba-

sis for Part B, in which 10 critical issues on working conditions within the context of

global e-work are to be examined.

A.1 What is e-work?

First of all, it should be stated that certain attempts to define e-work have produced

more confusion than clarity. This is due to the fact that several relevant discourses

have been taking place parallel to one another, each with its own specific tradition as

well as target groups upon which it focuses. The most popular concept in the last dec-

ade in the area of “distance working facilitated by information and communication

technologies” has been “teleworking”, in which case the target groups discussed are

primarily individual teleworkers, working away from the office premises of a company,

i.e. full-time or occasional, home-based teleworkers or multi-locational workers,

whether employees or self-employed. The European Commission has also used the

framework of teleworking, focusing on individual remote workers. Thus, teleworking

has been defined as “work performed by a person (employee, self-employed, home-

worker) mainly or for an important part at (a) location(s) other than the traditional work-

place for an employer or a client, involving the use of telecommunications and ad-

vanced information technologies as an essential and central feature of the work” (cf.

Blanpain 1997).

Within recent years, discussions on teleworking have not been superseded by the

framework of e-work, but become more specific and at the same time enhanced by it

(cf. European Commission, Status Report on e-work 2001). In a very broad definition,

e-work “encompasses any work which is carried out away from an establishment and

managed from that establishment using information technology and a telecommunica-

tions link for receipt or delivery of the work” (Huws 2001: 22). Hence, the use of the

term “e-work” in the place of “telework” includes not only individual, remote home-

10

workers and mobile workers, but also groups of workers based in the same remote

locational, such as “back-office” staff located in a call centre. Yet it should be noted

that call-centre staff was also a subject of the older telework discussion, specifically in

the case of call centres using home-based staff as agents, each connected to the cen-

tral call-handling system using telecom links. Using home-workers in this way (which

can provide staffing flexibility, particularly at peak times) has been described as creat-

ing “virtual call centres” (Di Martino 2001: 13).

Within the EMERGENCE-project (www.emergence.nu), e-work has been moved into

an overall framework involving relocation or tele-mediated, controlled remote work, be

it domestic or cross-border relocation. Hence, e-work is work that is done outside of a

“source” or demand location (i.e. where the tasks come from or are managed from) by

a “destination” or supply location (i.e. where the relocated e-work tasks are carried

out). According to the figure below, destination locations may be individual (employed

or self-employed) teleworkers away from office premises (at home, multi-locational

etc.) or a workforce on shared office premises belonging to the company or a contrac-

tor, i.e. external employees.

Figure A. 1.1: Typology of e-work

Contractual variations

Internal/employees External/outsourced

Individualised

(away from “office”

premises)

• Employed tele- or at-

home-workers

• Mobile employees

• Freelance or mobile

workers

Variations

in type of

workplace

On shared

“office” premises

• Remote back offices /

call centres

• Employees working on

other, third-party

premises

• Specialist business

service supply compa-

nies

• Outsourced call cen-

tres

Source: Huws / O’Regan 2001: 5

According to EMERGENCE, typical business areas identified as relevant for domestic

and trans-national forms of e-work are:

• sales (telemarketing and mobile sales)

• customer services, including providing information, counselling and advice to the

public or to business customers (call centres)

• data processing, typing and other forms of data input

• creative or content-generating work including research and development, design,

editorial work and multimedia production

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• software development, maintenance and support

• general management, human resources management and training

• accounting, debt collection and other financial services (cf. www.emergence.nu)

Definitions of e-work that only include modes of tele-mediated work, that is, remote-

controlled and/or relocated, seem to be too narrow in the light of global outsourcing

and co-sourcing activities in the network economy. Thus, this framework should be

enhanced by relevant concepts such as collaborative e-work, tele-cooperation or vir-

tual teamwork. If all workers who do some sort of tele-cooperation with co-workers

from distant locations are included in the definition of e-work, the proportion of e-

workers to the whole working population in Europe is by far higher than assumed up to

now. According to the ECATT-survey, carried out in 1999, comparing the share of

teleworkers to the percentage of those involved in tele-cooperation leads to the follow-

ing results (cf. www.ecatt.com): whereas all teleworkers in the EU10 (Denmark, Fin-

land, France, Germany, Ireland, Italy, Netherlands, Spain, Sweden, U.K.) account for

6.1% of the labour force, workers who occasionally or regularly tele-cooperate with co-

workers make up about 35% of all workers! (More detailed empirical figures on tele-

working, e-working and tele-cooperation are presented within this chapter below.)

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Definition of e-work

In summary, we define e-work as any mode of work organisation within a country or

between countries practising

• telemediated, controlled, remote work (individualised/isolated or office-based)

• telemediated, collaborative work (tele-cooperation, virtual teams)

Using this definition, e-work can be distinguished from similar concepts that are either

more restricted or more widespread:

Figure A. 1.2: e-work and si milar theoretical concepts

Telework

Individualised/isolated,

home-based or mobile

E-work

any telemediated, controlled, remote work

or telemediated, collaborative work

Online work

i.e. including just having access to eMail,

Intranet or Internet at the workplace

Knowledge-based work

with or without computers

White collar work

vs. blue collar work

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A.2 Who should be covered by a voluntary code for global e-work?

While it is not possible to quantify the extent of the workforce to be covered by a global

code for e-work, target groups can be specified. Multi-national companies should, of

course, be surveyed, as they have the largest potential for providing fair employment

standards and working conditions, occupational health and safety policies and partici-

pation in training programs. For a MNC, the strongest argument for integrating its e-

workforce dispersed over countries and continents, is not only to improve workers’ job

satisfaction, but also to increase productivity and output by means of fair arrange-

ments, thus strengthening commitment to the company (cf. Schwepker 2001).

Recent estimates assume that about 45 million people were working for approximately

65,000 MNCs and their subsidiaries around the world in 2000, most of the headquar-

ters being located in industrialised countries (cf. Kluge 2001). There is no indication as

to how many of these workers can be viewed as knowledge workers or even e-

workers. According to the ILO (2001: 111), “information” workers (as compared to non-

information or manual workers) can be divided into data workers and knowledge work-

ers (only those generating ideas and new knowledge). According to this definition, the

number of knowledge workers has increased substantially over the past few years. For

example, in the United States, their number increased by 2.5 million – 18 per cent of all

new jobs created – between 1990 and 1998. The “networking economy” will accelerate

the growth of the “knowledge economy”, since networking promotes the sharing of

knowledge by expanding access to the inexhaustible pool of knowledge from which

more knowledge can be created. With this in mind, it is not surprising that around 35%

of the workforce within the EU are involved in some sort of tele-cooperation. Moreover,

more detailed figures given below show that the larger the company, the higher, in

general, the proportion of employees involved in tele-cooperation with co-workers

within the company or with externals.

Coverage of the global code for e-work

The workforce to be covered by the global code of e-work to be endorsed by MNCs, is,

on the one hand, all persons doing some sort of e-work for a MNC, its subsidiaries and

suppliers. On the other hand, the specific types of e-workers to be protected, as com-

pared to on-site employees at the parent company, can be classified as follows:

Parent company on-site employees ��

e-workers in any country of operation

• e-employees in office-type premises of all distant units and subsidiaries of a multi-

national company

• e-employees in non-office-type premises; i.e. individualised/remote home-workers

or multi-locational workers

• e-lancers and self-employed; i.e. external or outsourced staff

14

• e-employees of suppliers and subcontractors of a multi-national company

At this point, a short treatment of the main causes and effects of the so-called “know-

ledge-based economy” or “networking economy” would be beneficial. The causes of

current changes in the whole labour market system (external flexibility) as well as in

organisations (internal flexibility) are varied, and here only some keywords can be

stated, hinting at complex interdependence.

15

Macro level of economies:

• Politically motivated steps toward liberalisation since the 1970s have led to in-

creasing economic globalisation and caused improvements in competition in al-

most all economic fields.

• The growth in the service sector is increasing economies' dependence on knowl-

edge, a dependence which is developing steadily due to the dynamic innovation

provided by the computer, telecommunication and multimedia industries. The use

of knowledge as a resource has, therefore, become the central factor of production.

• Individualisation and variation of lifestyle archetypes are causing changes in social

structures and differentiated value attitudes and lifestyle practices (cf. Castells,

1996).

Meso level of companies, especially MNCs:

• International or global conditions of competition in markets as well as regulation are

making for institutional convergence.

• Regional diversity of subsidiaries, their contexts, markets and environments are

making for persistent organisational divergence (cf. Harzing and Sorge, 2001).

Micro level of workplaces:

• Decentralisation of organisational forms are leading to boundaries between

independent and dependent working contracts (employed, atypical em-

ployed, self-employed, freelancing) being blurred.• Virtualisation of working relations is leading to different forms of e-work organisa-

tion in terms of space arrangements and working time (anytime, anywhere).

• Work organisation models are at a crossroads, i.e. rise in taylorist forms of organi-

sation (low autonomy, low participation in decision-making) as well as post-taylorist

forms of organisation (high autonomy, strong co-operation with participation in de-

cision making; semi-autonomous team work), (cf. Bosch 2000, for Germany).

All factors mentioned accelerate social change and tend to put a strain on the adjust-

ment framework of national welfare states; supranational “compensation” in the form of

re-adjustment is about to take place. Hence, working life is increasingly influenced by

the growing importance of knowledge-based work and results-oriented forms of control

and coordination. Conversely, the systems for regulating labour and representing in-

terests which developed in industrialised societies, designed mostly to meet the needs

of industrial workers for representation and protection, no longer seem adequate

(Töpsch / Menez / Malanowski 2001: 306).

New modes of work organisation involving e-work also raise a lot of questions for com-

panies, e.g. how to establish control and co-operation in the light of global business

activities by using ICT networks toward integrating complex patterns of value chains

16

and a culturally diverse workforce spread across different countries and continents.

Especially those working at a distance from the company headquarters either on sub-

sidiaries’ or suppliers’ premises or even as “stand-alone” workers need to be better

integrated, as compared to on-site workers on premises where the work is managed

from. Whereas within the borders of well-industrialised economies at least some as-

pects of e-work are regulated by labour and social security legislation, other problems

may arise in the face of e-work across borders. Moreover, e-work across borders can

be sub-divided into “trans-border” and “offshore” e-work (Di Martino 2001: 12). Trans-

border e-work generally applies to situations where the provider and receiver of work

are located in countries that share a common border (e.g. Germany/France or Ger-

many/Poland); thus, there is a kind of proximity despite working at a distance. Offshore

e-work across continents usually refers to work that has been transferred to lower-cost

or less-regulated working environments, generally much more distant in geographical

terms. Regulation of work arrangements across countries and continents still has a

long way to go (�

chapter B.1).

Table A.2.1: Some typical problems in compani es par ticipating in the networ king

economy

Individuals Organisation

Work demands increase, more pressure Competition increases, lifecycle of products

shortens

Greater competence and demands lead to

stronger wishes for self-determination and

participation

The changing economic structure alters the

nature of work, making it into knowledge work

Optional and at the same time compulsory

self-organisation

Decentralisation of control from direct to indi-

rect control (management by objectives)

Increasing worker income from different

sources (e.g. stock options)

Differentiation between core and peripheral

staff

Tendency towards individualised representa-

tion of interest

Higher staff turnover, drop-out rate

Differentiation of values and lifestyles Difficulty in creating trust and integration (di-

versity management)

Work becomes more and more important for

individual identity and social integration

“Good” organisational climate and corporate

identity as an advantage to productivity

Job satisfaction is a decisive basis for individ-

ual identity

Workers loyalty/commitment is a decisive

basis for business success

17

A.3 Empirical findings on e-work in industrialised countries

A.3.1 Empirical findings on remote, controlled e-work in industrialised countries

According to various studies, teleworking is expanding. Recent surveys covering the

teleworking situation in the European Union, such as the Third European Survey on

Working Conditions 2000 (Paoli/Merllié 2001), reveal that teleworking is no longer an

exceptional phenomenon. When restricting the focus to teleworking at home, tele-

working on a full-time basis is carried out by just over 1% of the working population in

the European Union, whereas occasional teleworking is more widespread (5% of

workers). One self-employed person in ten and 4% of all employees telework during at

least one quarter of their time. As figure A.3.1 shows, there are wide disparities be-

tween European countries, with the UK and northern European countries having the

highest number of persons teleworking at least one quarter of the time. These country

differences correspond to those regarding the general use of computers at workplaces.

Figure A. 3.1: I ndividuals t elewor king f rom home (by count ry); Paoli/Merllié 2001: 8

18

Figure A. 3.2: I ndividuals working with comput ers (by country); Paoli/Merllié 2001: 8

Telework is sometimes carried out under a “particular type of contract”: around half of

those involved are self-employed; among employees who telework 10% have fixed-

term contracts and 11% have “atypical” contracts. Moreover, there is empirical evi-

dence that teleworking from home is more common in certain occupations and higher

professional categories: 15% of managers, 12% of professionals, 8% of technicians

and 4% of clerks engage in teleworking at least one quarter of the time, compared to

only 1% of skilled workers and machine operators. Teleworking is also common in the

financial broking and real estate sectors (Paoli/Merllié 2001: 8).

If regular and occasional teleworking is not restricted to home-based work, but also is

made to include mobile or multi-locational working, e.g. on clients’ premises etc., the

percentage of teleworkers within the working population is even higher. A survey car-

ried out by the ECATT project in 1999 put the overall level of teleworking in the Euro-

pean Union at around nine million, which would represent a figure approaching 6% of

the total workforce. According to the ECATT findings, northern European countries

such as Finland (17%), Sweden (15%), Netherlands (15%) and Denmark (11%) are

the forerunners, whereas countries like Spain (3%) and Italy (4%) are lagging behind

(www.ecatt.com).

In order to put empirical data for individualised teleworking situations in Europe into

perspective, it would be helpful to briefly review other industrialised nations. According

to an overview of Di Martino (2001: 29 ff), the number of teleworkers in the US is

somewhere between 7.5 million (those using a modem) and a maximum of 12.5 million

(those using a computer). This would mean that, already by 1997, between 6% and

10% of the total workforce in the US was teleworking from home for a minimum of one

day a month. Unfortunately, information on other types of telework such as mobile

working is not so readily available. In Australia, the number of teleworkers was esti-

19

mated at between 5 to 6 % of the total workforce in 1999, in Canada the share varied

between 7% (Quebec, central region) and 12% (Alberta, periphery) in 1999. Empirical

findings for Japan estimated a total of 3 million teleworkers including mobile workers in

2000.

Turning from the individual to the company point of view, results of the Employer Sur-

vey 2000 carried out by the EMERGENCE project in the EU (15) plus Hungary, Poland

and the Czech Republic show that nearly half – 49% – of all European establishments

with more than 50 employees are already practising some form of e-work, as can seen

from Table A.3.1. In this survey e-work included any forms of remote work carried out

away from an establishment, yet managed by that establishment using information

technology and a telecommunications link for receipt or delivery of the work. Thus,

remote work excluding the use of ICT – like traditional home-based work or

outsourcing contracts to suppliers delivering some form of service – was not consid-

ered.

About 12% of the companies reviewed engage employed teleworkers, of which the

majority are multi-locational workers or remote, back-office workers, whereas the

stereotype of the isolated teleworker based solely at home is in fact one of the least

popular forms of e-work. Even more widespread than teleworking on the part of em-

ployees are several forms of outsourcing to companies and freelancers. 43% of all

establishments have contracts with supply companies or freelancers providing some

sort of specialised IT service such as call-centre services or software engineering.

Here, it is interesting to note that much of this e-outsourcing is carried out within the

region where the employer is based (34.5%), whereas substantial numbers (18.3%)

outsource to other regions within the same country, whilst only 5.3% outsource outside

their national borders.

Table A.3.1: E- work i n European compani es by type of e-work (in %)

Any e-work 49.0

Within the

organisation

All e-employees 11.8

Employees working in remote back offices 6.8

Multi-locational teleworking employees 9.9

Home-based teleworking 1.4

Remote call centre in company-owned back office (outside

own region)

1.4

Employees working in tele-centres, tele-cottages or other

office premises owned by third parties

0.9

Call-centre employees in tele-cottages or tele-centres 0.3

20

Outsourced All e-outsourcing (outsourcing using a telecommunications

link to deliver work)

43.0

E-lancers (freelancers using telecommunications link to

deliver work)

11.4

E-outsourcing within own region 34.5

E-outsourcing to other region in own country 18.3

E-outsourcing to companies in other countries 5.3

Outsourced call centre 15.0

Outsourced call centre with telecommunications link 11.1

Source: Huws/O’Regan 2001: 16; EMERGENCE European Employer Survey, 2000; weighted

figures; % of establishments with >50 employees in EU (15) plus Hungary, Poland and Czech

Republic.

Hence, international outsourcing, relocation and co-sourcing is a matter of larger com-

panies or MNCs, as is teleworking in general. ECATT results on the practising of tele-

working by size of establishment reveals that 73% of companies with more than 500

employees are engaged in remote working compared to 15% of companies with less

than 10 employees. In addition, Flecker and Kirschenhofer (2002: xvi), who published

a series of e-work related case studies within the EMERGENCE project, argue that

outsourcing and relocation across borders have up to now been confined to larger

businesses because these activities need to comply with certain specific requirements.

Besides the primary drivers of e-work relocation such as cost savings achieved by

economy of scale, cost differences between regions and/or companies and the avail-

ability of skilled labour and expertise, the following organisational facilitators seem to

be the most important ones:

• Existing contacts with partner companies and support from parent companies

• Workers’ involvement in preparation and execution of the relocation

• Clearly delineated tasks or projects including a high degree of standardisation and

formalisation as well as exact specification and documentation of the e-work to be

done

• Adaptation of work organisation and technology to the new environment

• Organisational change at the source in order to adapt to the new division of labour

• Dedicated and extensive efforts regarding knowledge transfer and training.

21

Case study: Siemens Austria

Expansion in Central Europe: Siemens Austria’s Programme and System Development

business area provides software for all Siemens operations worldwide. With nearly

5,000 employees at 20 locations in seven European countries and the US, it is a major

player in this field. After having operated and developed successfully only in Austria for

30 years, the company expanded dramatically into the Central and Eastern European

Countries during the 1990s. The motivation for this move was the pressure to cut

costs, made possible by achieving a mix of wage rates from high-cost and low-cost

countries. This led to the decision not to expand the operation in Austria any further but

to set up subsidiaries in the neighbouring CEE countries. In 1991 and 1992, compa-

nies were taken over in Bratislava and Prague; Budapest and Zagreb followed in 1994

and 1995. When competition on the labour market increased in the capital cities, new

units were set up in smaller university towns in Slovakia, Hungary, Croatia and Roma-

nia. Some of the subsidiaries are now among the biggest software companies in their

countries, and total employment has increased to 1,500, while the headcount in the

Austrian operations has remained stable.

An important pre-condition for the successful expansion into other regions was

support from the Siemens parent company, which was already present in all of the

countries concerned. Not only did this provide good business contacts but also the

technical infrastructure. Close relationships with local universities turned out to be im-

portant, too. At the organisational level, the company-specific method of software de-

velopment supported co-operation at a distance. At the beginning, joint development

projects were led by the Austrian operation, with employees from the other countries

contributing from a distance or working temporarily in Vienna. A recent tendency to

devolve responsibilities for project management and customer contact as well is mak-

ing the subsidiaries more self-reliant.

The main criteria for selecting locations in this case were wage costs and the

availability of university graduates. In addition, preference was given to geographic

proximity and a successful alternative to relocating to India or other Asian countries

was found.Source: Flecker and Kirschenhofer 2002, http://www.emergence.nu/news/cases.html

Which activities are most important for e-outsourcing? 60 per cent of the establish-

ments implementing e-work use it for software development and support, which is the

function most likely to be carried out remotely using a telecommunications link. The

second most common tele-mediated function, at 38%, is “creative work”, a category

which includes design, editorial work, multimedia content generation as well as re-

search and development. This is followed by management, training and human re-

source management (HR) functions at 19% and customer services at 18%. At 9% and

22

8% respectively, data processing activities and finance/accounting services also play a

significant role in e-work, with sales following at 6 per cent (Huws/O’Regan 2001: 19).

Data from the EMERGENCE survey also shows an interesting breakdown by Euro-

pean countries. Countries with high levels of e-work fall into two broad categories: ad-

vanced high-tech economies such as Finland (76%), Sweden (60%) and the Nether-

lands (58%), which make use of IT for a wide variety of e-work practices; and countries

in central, eastern and southern Europe such as Greece (74%), Italy (60%), Hungary

(67%), Poland (63%) and the Czech Republic (72%), which have very high levels of

outsourcing, sometimes rooted in economic systems which favour small firms or dis-

play a large, informal economy. The new information technologies have clearly en-

abled institutions in these countries to develop electronically-based subcontracting

networks to a considerable extent (Huws 2001: 24).

A.3.2 Empirical findings on collaborative e-work in industrialised countries

According to the table below, showing figures from Europe, there is empirical evidence

that forms of tele-cooperation between workers who are located at a distance has be-

come a common working mode for an increasing share of workers, at least in industri-

alised countries. Tele-cooperation is sometimes also called “in situ telework”, because,

although workers appear to be co-located in central office buildings, in fact they often

work together closely with project partners at faraway locations, while work-related

interaction with next-door colleagues is comparatively low (Gareis 2001: 41). As tools

for virtual collaboration over ICT networks are being implemented at workplaces all

over the world at great speed, data concerning the workplace level from the ECATT

survey in 1999 reveals that the share of all workers who regularly or at least occasion-

ally tele-cooperate with co-workers makes up for about 35% of the working population

in the EU10 (regularly 28%, occasionally 7%). Similar to the diffusion of telework,

northern European countries like Finland, Netherlands and U.K. are the forerunners,

whilst countries like Italy and Spain are lagging behind. The definitions used for tele-

cooperation are as follows:

• Occasional tele-cooperation: Workers who collaborate with others not lo-

cated at the same site at all (either externals or same-company workers lo-

cated in other establishments) using e-mail, video-conferencing, the transfer

of computer files or shared joint databases (e.g. Intranet)• Regular tele-cooperation: Workers who use email for collaboration with others not

located on the same site daily, or use video-conferencing or file sharing at least

once a week.

23

Table A.3.2: Tele-cooperati on in Europe

Workers who tele-cooperate as %

of all workers

Self-employed workers who tele-

cooperate as % of all self-employeda

Regularly

(in %)

Occasionally

(in %)

Never

(in %)

Regularly

(in %)

Occasionally

(in %)

Never

(in %)

Denmark 26.0 5.9 68.1 35.7 0.0 64.3

Finland 43.3 6.9 49.7 40.5 0.0 59.4

France 21.7 4.8 73.5 10.7 3.6 85.8

Germany 26.8 5.3 67.9 13.6 9.8 76.7

Ireland 32.1 5.4 62.5 16.6 6.5 76.8

Italy 17.6 9.8 72.6 9.7 11.7 78.6

Netherlands 29.9 15.5 54.6 20.0 28.9 51.2

Spain 19.7 4.2 76.1 12.7 6.4 81.0

Sweden 29.9 7.9 62.2 21.0 16.3 62.7

U.K. 37.5 5.2 57.3 14.7 1.7 83.6

EU10 28.2 6.7 65.1 13.6 8.1 78.3Source: EcaTT 1999; in: Gareis 2001: 42a Excluding workers in the primary sector

From a functional point of view, some tele-cooperating workers are not very different

from self-employed persons interacting with their partners over global ICT networks.

Nevertheless, the share of workers in Europe who tele-cooperate regularly or at least

occasionally is substantially lower among the self-employed than among the total work

force with the single exception of Denmark. Tele-cooperation with external workers is

more widespread among employees working in companies than among the self-

employed, although the latter have more external contacts with clients and customers

(Gareis 2001: 42).

A.4 Findings on e -work in developing/newly developed coun tries

E-work in developing or transition countries can be a “hidden” issue, i.e. in several

countries the presence of teleworking is neither properly detected nor acknowledged,

thus, there is seldom reliable data. Yet, using available data, investigations into the

prevalence of individualised telework in developing countries reveal that working at a

distance from the employer’s office premises is still a rare occurrence (Table A.4.1).

The World Employment Report of the ILO shows, for example, that in India in 1998, out

of a sample of 500 firms in Mumbai, about 1 per cent of employees were home-based

workers, 0.7 per cent were mobile workers, and 1.1 per cent were back-office workers.

24

Among firms that record experience with telework, actual practice is often confined to a

few workers from managerial staff. In Malaysia, 7.5 per cent of firms were found to use

teleworking and 3.4 per cent of the workers in the sample were involved in telework,

most of them doing mobile rather than home-based telework. Nevertheless, “in both

Malaysia and India, other sources suggest that in certain key sectors such as software,

finance and banking, printing and publishing, and telecommunications, there is a dis-

cernible incidence of telework” (ILO 2001: 127).

Table A.4.1: Summary of tel ework estimates out side Europe, US and Japan (mil-

lions)

1998 1999 2000 2001 2002 2003

Argentina 0.210 0.269 0.340 0.429 0.535 0.655

Australia 0.353 0.431 0.522 0.627 0.749 0.892

Brazil 0.013 0.019 0.029 0.045 0.069 0.104

China 0.001 0.002 0.003 0.005 0.008 0.012

India 0.027 0.039 0.058 0.084 0.121 0.173

Indonesia 0.001 0.001 0.001 0.002 0.003 0.005

Malaysia 0.022 0.033 0.051 0.075 0.109 0.155

Philippines 0.005 0.008 0.010 0.014 0.020 0.026

Singapore 0.019 0.026 0.036 0.049 0.067 0.090

Thailand 0.005 0.007 0.010 0.015 0.022 0.032

United States 18.643 21.408 23.815 25.862 27.563 28.992

Source: Nilles 1999: 43

While individualised forms of telework still seem to be an exception in developing

countries or countries in transition, relocalised, “off-shore” e-working or back-office

work like data processing, teleservices or software engineering on premises of local

businesses or MNCs subsidiaries are becoming more and more widespread. This is

made possible due to low cost technologies, generous tax regimes, competitive labour

costs and new skills in countries like Singapore, India, Malaysia, Thailand, Philippines,

Brazil, Mexico, South Africa, Morocco or Turkey. Inexpensive facilities not requiring a

large-scale infrastructure make this particularly attractive for companies. Especially call

centres – telephony-based services to customers in a variety of business sectors – are

becoming the most common form of telematically supported work. There is an upward

trend, not only in industrialised countries but also in developing countries. In Malysia

and Morocco, call centres have been found to attract diploma and degree holders, the

majority of them working full-time, many of them women. Women especially have wel-

comed the opportunities of employment outside the home afforded by call centres (ILO

2001: 129).

25

Case study: Morocco benefits from the call-centre boom

France Telecom, SNCF (the French railways company) and Attento (the Spanish busi-

ness company) are just three of the major international companies that have chosen

Morocco as a site for new call centres. Reasons for choosing Morocco range from tar-

geted marketing strategy on the part of local firms, governmental efforts to attract for-

eign investors – by liberalising the infrastructure and finance sectors, adapting its trade

and fiscal policies and introducing labour reform – and the low wages for skilled labour

(skilled youth unemployment in Morocco is above 30 per cent).Source: ILO 2001: 131

Yet there are concerns about possible health hazards brought about by repetitive work

in high-pressure working environments. Moreover, technology is progressively taking

over more and more simple functions, it seems to be permanently “catching up” with

work previously being undertaken by people. This has been the case with data entry

functions and is likely to be the case with a number of functions in call centres. There is

a risk that in the not too distant future employment even in currently booming forms of

e-working, such as call centres, will decline rather than increase. Thus, the manifesta-

tion of globalised forms of e-work is a mixed blessing. “The process is laden both with

unique opportunities for development and with new risks for isolation, discrimination

and social fragmentation. For developing countries the road to be followed is a narrow

one, which could lead to the exacerbation of economic dependency and the growth of

two-tiered societies, but which could also provide a chance of leapfrogging at least part

of the gap with the industrialised world” (Di Martino 2001: 45).

A.4.1 Which developing countries are participating in the digital economy?

Broadening the focus from e-work to cross-border B2B (business-to-business) in the

global information economy, there is evidence that international relocation of employ-

ment has become a key issue. Technological change and open economic and geo-

graphic frameworks have not only enabled opportunities for the globalisation of tangi-

ble goods, but also of intangible services. Within ICT-enabled services, the potential for

an international division of labour determined by relative costs is enormous, as high-

cost economies move up the value chain, leaving lower value-added activities, such as

remote processing and back-office functions, to be contracted out to lower-cost devel-

oping economies. Limits to the externalisation of work arise not so much from technical

barriers anymore, but from considerations of managerial efficiency. “Inherent in the

technologies is the possibility for developing countries to become better integrated

within global value chains, with the greatest degree of integration occurring through

trade in intangible products. Opportunities in this area include software development,

back-office work for banks and insurance companies, publishing, medical transcription,

26

data processing, the creation of web pages and databases, or the digital transcription

of engineering drawings and maps” (ILO 2001: 99).

Case study: the Indian software industry

The most often cited example of cross-border B2B transactions is the Indian software

industry. It has grown at an annual rate of 56 per cent over the past five years, contrib-

utes 10 per cent of India’s GDP growth, and currently generates revenues of nearly

US$4 billion annually. In 1997, revenues from trade in software in India were US$3

billion – the world market was valued at between US$300-500 billion. A total of

500,000 people are now employed in the industry, 27 per cent of whom are women.

Women’s share in the employment total, moreover, has been increasing in recent

years.

To a great extent, the activities in software and related services, including in-

formal sector activities, are delivered by small and micro-enterprises. The majority of

workers in these establishments have at least a college degree or a higher qualification

in addition to some training. Most employees treat their jobs with informal sector estab-

lishments as stop-gap arrangements while they are still under training or studying.

The links between the informal and the organised formal sector are nearly al-

ways vertical, with most of the customisation and data entry firms serving the end-user

clients in the organised sector. The attractiveness of these smaller firms lies in their

price competitiveness and more personalised services. As in other sectors, software

development projects are considered to pass through a series of lifecycle phases that

can be represented as a “cascade” of activities. These activities propel systems-

relevant knowledge through a series of transformations from the “upper end” of the

cascade where knowledge is viewed from a business-oriented perspective to the

“lower end” where a computer-oriented perspective is adopted. “Upper-end” tasks such

as business analysis or more complex software solutions for individual clients are still

often confined to industrial countries or larger businesses, whereas the well-specified

“lower- end” tasks like coding and producing standard solutions are carried out in

smaller firms.Source: ILO 2001: 99, 122, 143

Nevertheless, the World Employment Report 2001 by the ILO points out that the suc-

cess of countries like India, Brazil, the Philippines, Israel or Romania in participating in

global value chains is the exception, not the rule. For many other countries to take ad-

vantage of this trade in intangible products, a wide range of business pre-conditions

need to be met. Thus, evidence of successful cross-border B2B in some other coun-

tries is more anecdotal: “In Morocco, for example, a local Internet service provider

(ISP) is converting the paper archives of the National Library of France into digital

form. In Togo, the world’s first Internet-based call centre has been set up to provide

globally competitive telephone support services for companies with customers in North

27

America. In Senegal, a company employs 30 skilled CAD technicians in computer-

assisted architectural design for European clients“ (ILO 2001: 99f).

In brief summary, there are important niches in the market for long-distance services

that can be successfully exploited by developing economies with a literate workforce

and a modern telecommunications system. Potentials to exploit such niches depend

upon the local skills base, infrastructure, market and regulatory environment. Jack

Nilles, among others, argues that although large developing countries such as China or

India have a high long-term potential for both e-work and e-commerce, these are not

likely to attain significant international impact for at least a decade.

• Most of the developing countries have yet to put into place the information infra-

structure necessary for efficient e-commerce or e-work. Telephone penetration is

low and telecommunications prices are excessive when compared to con-

sumer/business purchasing power.

• There are teleworkers in all of the countries surveyed, but most of these countries

have no telework policy or plans for support of demonstration projects. The excep-

tions are Malaysia and Singapore (Nilles 1999: 43f).

Thus, whether the global information economy will become an inclusive “high road” to

e-work or only a “low road”, exploiting cheap labour on a global scale, is an open

question far removed from simple forecasts. The table below presents outlooks follow-

ing a more pessimistic and a more optimistic scenario, both applying not only to devel-

oping countries, but obviously to industrialised ones as well.

Table A.4.2: Scenarios for work, flexibility and ICT

Dimension of

job qua lity

Pessimistic scenario Optimistic scenario

Employment

opportunities

ICT destroys work (automation and

rationalisation)

ICT creates work (develops new markets

and human capital)

Labour

relations

ICT isolates and imposes stress on

individuals (working in different times

and places and being overloaded with

information)

Dismantling of traditional ties between

the employer and the employee pre-

sents new opportunities for the em-

ployer to shift risk onto his employees

ICT interconnects and stimulates indi-

viduals

Dismantling of traditional ties between

the employer and the employee provides

less constrained opportunities for broader

work experience and skills development

for the worker

Skills ICT downgrades skills and compe-

tence to single-task machine-tending

ICT upgrades skills and competence,

multi-tasking creativity

Pay ICT reduces pay (downgrades skills

and weakens workers’ collective bar-

ICT increases pay (augments skills; skill

shortage)

28

gaining power; increase in part-time

contracts)

Career

opportunities

ICT creates “dead-end” jobs (surveil-

lance and threat of outsourcing; part-

time)

ICT expands career opportunities

(strengthens connectedness among or-

ganisations)

Discrimination ICT excludes older workers and

women from the labour market

ICT opens up new opportunities for vul-

nerable groups

Job protection

and collective

bargaining

ICT leads to fragmentation and new

employment contracts, undermining

systems of collective bargaining and

employment regulation

ICT blurs the boundary between em-

ployee and employer and thereby re-

duces the need for traditional employ-

ment protection/regulation; calls for new

forms of protection

Power and

autonomy

ICT leads to a divided society (cen-

tralises power, control)

ICT leads to more individual flexibility and

freedom of choice

Work intensity ICT leads to work intensification ICT reduces time taken to perform tasks

and thereby provides opportunities to

reduce work effort

Health Cumulative impacts of many hours

working at a computer (e.g. physical

ailments such as screen fatigue and

carpal tunnel syndrome)

ICT reduces the physical burden of work

Work-life

balance

Work takes over life (pressure to work

everywhere and all the time)

Work is integrated with and subordinated

to daily life (work is adjusted to the needs

of family and personal life)

Source: ILO 2001a: 146

29

P A R T B . R E L E V A N T I S S U E S I N G L O B A L E - W O R K

B.1 Teleworking conditions

Within this chapter, individualised modes of remote work outside a company’s office

premises are to be examined – i.e. full-time or occasional home-based telework. In

discussing home-based teleworking, some crucial issues to be addressed are: isola-

tion; reduced support in personal development and the risk of deskilling; overlapping of

working time and free time; lower job security; weakened contractual force; more pre-

carious work; increased work stress; and a less suitable working environment.

First, an empirical overview of the socio-economic characteristics of teleworkers is pre-

sented by using data from the UK. Literature reviews have shown that there are still

limits to being able to quantify this issues, especially on a global scale. Second, typical

phenomena and problems arising from individualised remote work are identified (other

aspects of individual working conditions are discussed in the following chapters below).

Third, the chapter continues with a summary of the discussion on legal frameworks for

individualised telework, closing with a case study involving British Telecom and a good

model code of practice for individualised telework.

B.1.1 Socio-economic characteristics of teleworkers

Although, quite clearly, the technology is now available to make telework an attractive

option for employers, the empirical data included above indicates that fully home-

based telework is very uncommon in industrialised countries, at least as far as the em-

ployed workforce is concerned. In contrast, individualised forms of remote work such

as occasional telework or multi-locational work are more widespread. Such employees

can benefit from a more flexible working life as compared to that offered by the tradi-

tional workplace. Thus, when e-workers are embedded in the organisational life of the

company in adherence with acknowledged regulations, working at home is seen as an

enriching and liberating experience. Yet there are disadvantages, too, including pre-

carious contracts or the feeling of being isolated from one’s employer and from fellow

employees. The risk that women seeking to combine work with child care or those dis-

advantaged in the labour market get stuck with isolated, exploitative and low-paid work

at home seems to be confined to cases of fully home-based workers or atypically em-

ployed persons. The latter lack adequate agreements with their employers or inade-

30

quate labour legislation in general exists – this is especially true in developing coun-

tries as well as countries in transition.

Case study: Datamatics Technol ogies Private Ltd., an Indian software co mpany

The operation of the Indian stock exchange is now nationally distributed among small

traders with the help of ICT. Today, 8,000 people work behind 4,000 terminals, com-

pared with earlier when only 200 people formed the trading ring. [...] Teleworking made

available in 260 cities by the National Stock Exchange has created this indirect em-

ployment. In a similar way, the newspaper Asian Age is produced simultaneously in

Delhi, Mumbai and London using satellite technology. Another example is Datamatics,

a new software and data-entry firm that outsources work to a network of teleworkers.

Datamatics is one of the fastest growing software companies in India. Outsourcing a

large part of its work to teleworkers, it has been creating a revolution in the Indian

software market. While data warehousing is done internally, electronic publishing and

back-office processing are delegated to teleworkers. With 265 internal employees at

present, the number of teleworkers has grown to 600 since the company introduced

teleworking, beginning with ten teleworkers in 1990. Women form 98 per cent of the

teleworking workforce and are entirely home-based. In fact, one of the company’s main

reasons for outsourcing work to teleworkers is to utilise the latent pool of talented indi-

viduals, mostly women, who cannot work full- time due to various obligations. They are

given work involving tasks such as entry and word processing. More specialized tasks

are assigned to core staff.Source: ILO 2001a: 131f

A more detailed picture of the socio-economic structure underlying one of the forerun-

ners of telework – UK – is provided by figures from the Labour Force Survey of 1998

(ILO 2001: 128). In the UK the numbers working “mainly” at home rose to 2.5% in

1998. Those working at home for at least one day a week account for 3.5% of the em-

ployed workforce, while those reporting working at home at least “sometimes” account

for a further 22%. Three out of five people who work at home at least one day a week

rely on keeping in contact with clients and colleagues via computers and telecommuni-

cation, compared to just under half of those working mainly at home. But who are the

teleworkers in the UK?

• Compared with the rest of the working population, teleworkers are more likely to be

graduates, to be married and to be in the middle of their careers (in their thirties or

forties).

• Most teleworkers are found in senior jobs: 28% are managers, 22% are profes-

sionals and 18% work in associated professional or technical occupations.

• Over a quarter of all teleworkers (27%) work in business services sectors with an-

other 25% in the public and voluntary sectors.

Are women more prone to work at home?

31

• Women outnumber men among those working mainly at home (69% versus 31%).

However, the opposite is true among those who work at home less frequently.

• For women there appears to be an association between working at home and child

care; women who work mainly at home are more likely to report having dependent

children than peers who work elsewhere.

Do those who work at home receive lower rates of pay than their peers?

• On the average, home-based teleworkers receive rates of pay well above their of-

fice-bound colleagues (11.37 GB pounds/hour compared to 9.07 GB pounds). After

controlling for other factors considered to affect rates of pay, women who perform

non-manual jobs at home receive a 16-percent premium, while men’s working lo-

cation makes little difference to the pay they receive.

• Among a fifth of all home-based teleworkers, the incidence of low pay is relatively

high.

B.1.2 Crucial aspects of individualised forms of remote work

The crucial aspects to be faced when home-based teleworking is accepted may be:

isolation; reduced support for personal development and risk of deskilling; overlapping

of working time and free time; lower job security; weaker contractual force; more pre-

carious work; increased work stress; and a less suitable working environment. Roughly

speaking, four areas can be identified when requirements are clustered according to a

trade union perspective. A number of teleworking guidelines by the MSF Information

Technology Professional Association are reported below. These guidelines aim to ad-

dress the problems teleworkers might face and to ensure that they are treated in the

same ways as other employees (source: ILO 2001: 154, see also: www.eto.org.uk)

Legal and contractual situation of teleworkers

• Teleworkers should be employees of an enterprise and not deemed self-

employed.

• Teleworking should be voluntary with a right to return to working from the office.

• Teleworkers should enjoy the same rates of pay and employment benefits as of-

fice-based workers, including child care provision and family leave.

Technical equipment and privacy at home

• There shoud be a separate room available at home for teleworking, a separate

telephone and payment for additional costs such as heating and lighting.

• All computer equipment should be provided, paid for and serviced by the em-

ployer, who will be responsible for installation, maintenance, insurance and com-

pliance with health and safety requirements. The employer should also accept

legal responsibility for any accident or injury.

32

Isolation, exploitation and work-life balance

• To avoid isolation, contracts of employment should require home-based workers

to periodically attend the office.

• There should be a defined number of working hours. Teleworkers should be in-

cluded in career development and appraisal schemes including training opportu-

nities.

• Teleworkers should have access to trade union representation and be able to

attend meetings within working hours. Health and safety advisers and trade un-

ion representatives should be able to visit teleworkers.

Management of teleworkers and communication with peers

• There should be regular meetings between teleworkers and electronic mail and

telephone links with other teleworkers should be provided at the employer’s ex-

pense.

• There should be regular weekly liaison discussions between a teleworker and his

or her supervisor/manager.

Meanwhile a large number of evaluation studies covering teleworking pilot projects in

companies as well as in public administration (www.ecatt.com, www.euro-telework.org,

www.eto.org.uk) exist. Some examples are presented in the following:

• The telecommunications multinational Nortel found that among its teleworkers work

satisfaction increased by 45%, productivity improved by 30% and stress reduced

by 46%.

• The computer company 3Com switched 120 staff to using their homes as their

base and found these subsequently spent 25 hours a week with customers

(against 12 to 15 hours previously) and 40% less of their time was taken up by in-

ternal meetings.

• Computer manufacturer Compaq reported productivity increases ranging from 15

to 45% as a consequence of teleworking (Di Martino 2001: 70).

The lessons learned from such evaluations can be roughly summarised as follows:

productivity rates and job satisfaction among teleworkers are high and even increase

(when compared to the figures for the former, company-based workplace) as long as

two pre-conditions of telework are met: first, telework is done not fully home-based, but

only occasionally; second, there are collective framework agreements between the

employer and bodies representing employees as well as arrangements including most

or all of the aspects formulated above with the respective teleworkers. The combina-

tion of occasional teleworking and binding agreements are the basis of mutual trust

and prevent precarious tele-workplaces, i.e. the risk of lay-offs or being outsourced.

Experts interviews which CSI has carried out with teleworkers in large Austrian com-

panies like Siemens Austria and Austrian Airlines, both of whom have company-wide

33

teleworking arrangements, confirm that teleworking carried out by professionals is

more a positive incentive than a threat.

Case study: British Telecom Options 2K

Initially, teleworking in BT was launched with the aim of reducing operating costs.

However, the focus has shifted now, with cost still the primary driver, but to include a

greater appreciation of facilitating the demand for teleworking arrangement from em-

ployees. Indeed, this is the main rationale for naming the project Options 2000 – rec-

ognising people as "options".

The target group is the white-collar workforce. The programme team comprising

Facilities, IT and Human Resource specialists formally planned the initiative. It has

received full backing from the company’s board. It was preceded by a well-organised

promotion campaign aimed at creating and further raising awareness about telework-

ing, its potential and benefits. Initial response from employees was very enthusiastic –

3,500 people registered in the first 60 days, expressing a desire to telework. There is

an onus on line managers to consider their requests. The emphasis is on complying

with them where both the job and the person are deemed suitable for teleworking. It is

also envisaged that the target number of 4,000 could even be higher, but the company

wants to follow a previously tested route, doing trials in business units and then rolling

out each individual teleworking scheme. In addition, the logistic task of setting up and

maintaining organisational arrangements for 4,000 teleworkers is in itself enormous.

Benefits of the initiative

It is estimated that work productivity has been increased by 20% (data based on previ-

ous initiatives). Furthermore, there has been a positive impact on the environment,

quality of work life, and employees’ morale. It has also been reported that good tele-

working managers regularly become even better managers, since their communication

effectiveness increases even further. Unfortunately, “bad managers”, that is to say

those who did not communicate effectively with their teams in the first place, simply

remain so. Thanks to teleworking, the speed at which the products reach the market is

improved. The managers get their teams, necessary for developing new products,

working together much more quickly by using teleworking.

Barriers to the initiative

The barriers reported relate mostly to the previous teleworking initiative. It was re-

ported that recruiting graduate teleworkers was difficult, primarily due to the fact that

they did not get a chance to absorb corporate culture. Another reported barrier related

to the opposition offered by some sections of senior management to teleworking ar-

rangements. Another potential barrier could be the tendency noted among some tele-

workers to work too hard. One of their managers' tasks is to identify and prevent this

from occurring, and to adequately manage overwork.

Impact(s) of the initiative

34

The biggest impact of the teleworking initiative in BT has been to change the organisa-

tion from supporting buildings to supporting people. The initiative has brought some

changes for managers too, who need to work in a different way and learn to manage

people remotely. Of course, the managers still bring their teams together at least once

a month whenever possible, in order to supplement virtual with physical interaction. In

addition, the practice widely adopted in BT is to manage by objectives, which can be

effectively applied to teleworking. The company has become more aware of employ-

ees’ demands regarding work arrangements and more responsive towards them.

Expectations and future organisational plans

It is envisaged that the volume and type of services provided by using teleworkers will

expand, consistent with the increase in their numbers. Generally, it is expected that

teleworking will become even more efficient and effective. Thus, with the increase in

numbers of teleworkers, economies of scale will take hold and the cost for maintaining

teleworkers will decline exponentially (for example, the cost of providing them with the

necessary remote access service). At the same time, increased effectiveness will be

achieved since technological developments allow practically any task to be done re-

motely, in addition to facilitating some new ways of working such as the formation of

virtual project teams.Sources: http://www.wfh.co.uk/wfh/consultancy/casestudies/option2k.htm; Di Martino 2001: 74

B.1.3 Existing regulatory frameworks for individualised teleworking in Europe

Teleworking is still not a legal category. As it is a quite new phenomenon, there is as

yet no source of law in custom or practice. Although there is already considerable ex-

perience in many countries in trying to establish appropriate regulatory mechanisms,

most countries do not currently have particular laws specific to teleworking. Telework is

covered by two types of regulations: those governing homework and VDUs (visual dis-

play unit). When determining the legal status of teleworkers, therefore, one basically

has to fall back on existing and traditional legal categories and the arsenal of rules

which goes along with applying them (European Foundation (without year), 2). What

can be found are numerous activities mentioned in teleworking agreements with re-

spect to the sectorial level and the level of individual enterprises or even nation-wide

initiatives adhered to on a voluntary basis. We will present below a brief overview of

initiatives at the trans-national, national, sectorial and company levels based on the

work done by the European Foundation for the Improvement of Living and Working

Conditions and by Di Martino (Di Martino 2001: 104ff).

Initiatives of the ILO and the European Union at the trans-national level

In 1996, the International Labour Organisation adopted a new Convention (no. 177)

and Recommendation (no. 184) relating to homework. These instruments do not ex-

pressly mention telework. Nevertheless, they provide a definition of homework which

35

would seem to cover a number of situations in which tele-homework is performed. In its

proposed convention on homework, the ILO wants employees working at home to be

given equal treatment with other (office-enterprise) employees. Yet, it is far from being

generally accepted that ILO instruments concretely apply to teleworking (Di Martino

2001: 107).

The European Union has awarded telework (and more recently e-work) considerable

status as a symbol of the EU’s desire to develop into an information society and the

most competitive economy by 2010 (eEurope action plan). In a consultation document

issued in mid-2000, the Commission identified a number of issues for discussion and

negotiation, including: definition of telework; arrangements for the introduction of tele-

work; sustainability of jobs in teleworking and selection of teleworkers; arrangements

regarding the home office; rules and procedures for communications, including con-

sultation; training requirements; company security policies; terms and conditions of

employment; monitoring and review of telework (European Commission, DG Employ-

ment and Social Affairs 2000). The Commission has suggested that “framework provi-

sions” on telework be developed at the EU-level for implementation in individual mem-

ber states. The European Trade Union Confederation (ETUC) represents the workers’

side in these discussions. Moreover, the Commission has launched a number of EU-

funded projects in attempts to promulgate best practice and develop codes of practice

for telework implementation. One of these, the DIPLOMAT project, has developed a

European Charter for Telework, which was endorsed by 600 signatories from across

Europe (Hochgerner/Lacina 1998). Telework was also the subject of a European Un-

ion-wide agreement between the members of the Sectorial Social Dialogue Committee

(SDC) for Telecommunications, finalised in 2001. The SDC links together representa-

tives of employers with the telecommunications sector of Union Network International’s

UNI-Europe (see below: Guidelines for telework in Europe from the SDC). The agree-

ment has identified 12 principles for telework and called for implementation of the

guidelines by the end of 2001 (Martino 2001: 108).

Legislation at the national level

Teleworkers are either employees or self-employed, or even a mixture of both. In cer-

tain Member States there is an in-between category, apart from the employee or self-

employed, which is legally recognised as the “homeworker”. As a homeworker, the

teleworker can be an employee, possibly of a specific sort, or can be classified as self-

employed, depending on the applicable legislation and case law of the Member

State(s) in which the work is performed. Homework covers work performed anywhere,

either at home or in any premises other than the workplace of the employer. If the work

is done “in subordination”, i.e. under the command and the control of a contractor, the

teleworker is considered an employee; if not, he/she is seen as self-employed. This is

an extremely important distinction. In the case of subordination, labour law applies,

36

with a protective umbrella of minimum standards, social protection and specific social

security provisions. In the case of self-employment, there is only whatever protection

any written or informal agreement contains. However, the category “self-employed” is

now being widely relied on to determine the legal status of teleworkers. The reason is

simple: a self-employed worker is less expensive from the point of view of social secu-

rity costs, and much more flexible, as no protective labour standards apply and full

contractual freedom prevails. This can be to the economic advantage of either party,

depending on their respective market strengths (European Foundation: 2).

Some national acts of legislation making efforts for clear distinctions between self-

employment and employment may point to future developments. This development has

been particularly encouraged by recent legislation (1994) in France , where a tele-

worker, if registered as a tradesman or as a commercial agent, is de jure looked upon

as self-employed unless proof of the contrary is given. In contrast, a new Act has been

passed in Greece (1990) whereby collective agreements are also applicable to inde-

pendent workers in such cases where it is evident that they are economically and so-

cially dependent (European Foundation: 3). In Germany , a new law passed in 1999

covering “pseudo” self-employment makes it more difficult to employ teleworkers as

subcontractors of only one company, a device of choice for avoiding the payment of

social insurance contributions.

Partnership agreements at the national, sectorial and company level

By and large, published studies of teleworkers present the picture of a worker who vol-

untarily engages in telework, has the right to return to headquarters and is basically

treated as another employee. An increasing number of companies as well as public

administrations have concluded framework agreements with unions and employee

representative bodies (works councils) embodying these principles. Sometimes the

initiative for voluntary agreements comes from the federal government. Some exam-

ples: in Ireland , the Ministry for Science, Technology and Commerce set up the Na-

tional Advisory Council on Teleworking in 1998. This advisory committee was also re-

sponsible for developing a national Code of Practice on Teleworking (recently renamed

Code of Practice on E-working), which has been endorsed by the employers’ associa-

tion IBEC and the Irish Congress of Trade Unions. The code encourages the introduc-

tion of formal teleworking policies in companies and organisations as a way of avoiding

potential problems which may arise from introducing a new form of work organisation

(see http://www.telework.ie/nact/index.html). In Sweden , a joint recommendation by

the trade, commerce and services sector, signed in November 1997, serves as a guide

for telework agreements at the company or individual employer/worker’s level. 80,000

employees are potentially covered. In Italy , the employers’ organisation Confindustria

and the national trade union confederations CGIL-CISL-UIL signed a collective agree-

ment in July 2000 covering 300,000 workers in the “new economy” sector. The agree-

37

ment includes a range of working practices, including part-time and weekend work, as

well as provisions for different types of telework, including home-based working, tele-

centre work and call-centre working. In Austria , a model telework agreement drawn up

by the Union of Salaried Employees (GPA) was adapted as the basis for a framework

agreement addressing teleworking among industrial employees and for another cov-

ering electricity enterprises. The agreements cover 160,000 workers and are aimed

mainly at employees combining in-company work with telework.

In terms of single company agreements, one of the most influential has been the one

signed in Germany between the management of IBM and the central work council of

IBM, one that has been widely used as a model in Germany and elsewhere. Some

other relevant company agreements covering telework are those published by

Deutsche Telekom , Telecom Italia , Compaq or Electrolux Zanussi (Di Martino

2001: 110ff).

Trans-border regulations for telework

Regulatory frameworks for trans-border telework are to a large extent still incomplete.

Telework sub-contracted overseas introduces a new dimension to the international

division of labour, and certain industrialised countries take advantage of this. The

emergence of this new way of organising work poses a certain number of legal prob-

lems at both the European and international level in terms of the black economy, social

dumping, etc. While cross-border work within the EU may be subject to certain legal

provisions, for trans-border telework outside the EU no such framework currently ex-

ists. Hence, the matters of how to secure occupational social protection or paid holiday

schemes for teleworkers, whose legal status is somewhere between self-employed

and employee, are still open questions. The World Trade Organisation has started to

discuss these matters.

In cases of trans-border telework within the EU, the European Convention on the Law

applicable to Contractual Obligations (1980) must be referred to (Council Directive of

20 October 1980 on the approximation of the laws of the Member States relating to the

protection of employees in the event of the insolvency of the employer). This has been

ratified by most Member States, and it means that freedom of choice of the applicable

law is the general rule. According to these rules, in the case of self-employed tele-

workers the contract parties are free to agree on which law should be applicable to the

contract. If the parties have not made a choice, the contract shall be governed by the

law of the country where the service provider (i.e. teleworker) resides. The situation is

quite similar for employment contracts: the parties are free to agree on which law

should be applicable to the contract, and in the absence of an agreement the applica-

ble law is that of the state where the employee normally carries out his/her work in

performance of the contract. If the employee does not habitually carry out his/her work

38

in any one country, the applicable law will be that of the country in which the business

he/she works for is situated. However, the free choice of law with regard to employ-

ment contracts is more restrictive than in the case of self-employed: according to the

relevant Convention, the employee always maintains the protection afforded to him/her

by mandatory rules contained in the law which would be applicable in the case that no

agreement had been concluded – fall-back law (Di Martino 2001: 117).

European Union Regulation 1408 contains provisions for the co-ordination of the

member states’ social security laws. Article 13 states that the law of one member state

only can be applied and lists a number of criteria for determining the applicable law.

The main rule is that the applicable law is the law of the member state in which the

(tele)worker habitually works. Especially in cases where teleworkers accept work from

several employers in one or more countries, the social security system of the state

where the person works applies. The regulation applies to EU nationals and several

other groups, but does not at present cover third-country workers or EU nationals ha-

bitually working outside the EU area (Di Martino 2001: 117). Thus, if work is transferred

to workers outside the EU, Regulation 1408 does not apply and the EU and its Member

States are not responsible for the social protection of these workers. It must be de-

cided whether such outsourcing should be regulated. It is, however, important as part

of a general policy that customers and teleworkers be required to register themselves

and their work, in order to prevent black-market economies.

B.1.4 Guidelines for Telework in Europe

The “Guidelines for Telework in Europe” is a European Union-wide agreement among

the members of the Sectorial Social Dialogue Committee (SDC) for Telecommunica-

tions linking together representatives of employers within the telecommunications

sector of Union Network International’s UNI-Europe. This agreement was signed in

Brussels on 7 February 2001 by Telekom Austria, Belgacom, British Telecom, Eircom,

France Telecom, KPN, OTE, Sonera, Telecom Luxemburg, Telecom Italia, Telecom

Portugal, Telefonica, and Telia.1

1. Preamble

The Sectorial Social Dialogue Committee (SDC) for Telecommunications believes that

the modernisation of employment markets is crucial for the future economic develop-

ment of Europe.

1 Source: http://europa.eu.int/comm/employment_social/general/news/telework_guidelines.pdf

39

Rapid changes in the competitive environment coupled with the development of new

technologies, call for the modernisation of work organisation. New technologies, global

competition and the increasing speed and volume of information, call for flexible and

adaptable working relationships and organisation.

Telework constitutes a form of work organisation whose increasing use is a clear sign

of a trend towards a more flexible and more mobile workplace. Telework is particularly

important for the telecommunications companies, for whose products and services it

provides an important field of application. Against this background, the Sectorial Social

Dialogue Committee for Telecommunications believes that Europe-wide principles on

telework are an important enabler for developing flexible work organisation in all the

European telecommunications companies. Therefore it has adopted the following

guidelines for telework which it proposes for adoption by the telecommunications com-

panies in Europe, on a voluntary basis and according to each country’s laws and col-

lective bargaining practices. In doing so, the SDC has fulfilled the pledge contained

within the joint statement for the Lisbon Summit.

2. Objectives

The Committee believes that telework, organised and introduced as a human and so-

cially meaningful working method, can help in pursuing the following objectives:

• Arranging flexibility of work organisation

• Employment opportunities for structurally weak regions and for disabled people

• Greater responsibility for individual workers in planning and carrying out work

• Humanisation of work

• Improvement in the work/life balance

• Improvement of quality and productivity of work

• More job satisfaction

• Transference of work to people

3. Field of application

Having recognised the particular characteristics of home-based telework, the SDC

clarifies that the following principles refer to those employees_who, using information

and communications technology, carry out all of their work at home, or regularly per-

form some work at home whilst the remaining part is performed on the company’s

premises.

4. Principles

1. The introduction of telework will be voluntary on both sides. Collective agreements

should be reached at the appropriate level (e.g. industrial, company) in order to provide

a framework for the introduction of individual telework arrangements. Telework will take

place subject to the suitability of the individual, the work and the working environment.

40

2. Teleworkers will be treated equitably with employees working on Company prem-

ises, and will be assigned to a Company organisation unit. Therefore, when an em-

ployee previously working on a company's premises agrees to telework, his/her em-

ployment status and conditions will not be affected.

3. All equipment will be provided, installed and maintained by the Company and will be

returned if Teleworking terminates for any reason.

4. Consideration should be given, by the employer, to meet any additional costs in-

volving Telework.

5. Teleworkers will have access to the same opportunities for training, career devel-

opment and career advancement, which are available to other employees working on

Company premises. They will be involved in the same “work review” policies adopted

by the Company for the other employees.

6. When the home workplace is no longer available, the employer will make every ef-

fort to find alternative employment in accordance with the provisions of collective

agreements and legislation.

7. The relevant Company’s H&S regulations, according to laws and collective agree-

ments, apply to teleworkers’ home workplaces.

8. Arrangements should be made in order that teleworkers do not undergo exclusion

and isolation, including, as far as possible the opportunity to meet with colleagues on a

regular basis and access to company information.

9. Teleworkers must ensure that all equipment, information and data files are kept con-

fidential and secure in conformity with Company policy on security and data protection.

10. Teleworkers must be informed of any performance monitoring facility adopted to

control their work. As far as possible, control should regard output rather than activity.

Any performance monitoring arrangements must be consistent, having regard for the

specific characteristics of telework with those applied to those who work on Company

premises.

11. Visits by company managers and employees to the home of Teleworkers must be

by prior appointment and agreement.

12. Teleworkers have the same collective rights as the other employees working from

company premises including the rights of communication with Works Council and

Trade Union representatives.

5. Future developments

The SDC recommends these guidelines for adoption by the end of 2001, on a volun-

tary basis and according to each country’s laws and collective bargaining practices.

The SDC agrees to monitor the adoption of these Guidelines in 2002.

41

B.2 Quality of work and employment (in flexible work s ystems)

As described within part A of this report, e-work can be divided into individualised and

office-based modes. Whereas in chapter B.1 crucial matters involved in individualised

forms of telework (i.e. home-based work) are examined, it is clear that office-based e-

workers share some of the characteristics of white-collar workers or knowledge work-

ers in general. Hence, chapter B.2 gives an overview on the most relevant aspects of

employment and job quality with a focus on knowledge workers. According to the

European Foundation for the Improvement of Living and Working Conditions, four ar-

eas of job and employment quality can be identified (European Foundation, 2002: 6).

In the light of these objectives, there is no doubt that decisions on work organisation

have an impact on employment and job quality. Furthermore, working conditions are a

crucial factor not only for workers’ job satisfaction and commitment to the company, but

also for ensuring and improving a company’s performance. Thus, a short assessment

of the indications for changing working conditions, such as increasing flexibility and

intensification of workload, will be presented first. Such developments are due to the

shift in employment structure from industry towards the service sector, a greater em-

phasis on market constraints as well as the growing use of ICT. Second, general as-

pects of (a) career and employment security (e.g. modes of atypical employment), (b)

health and well-being (e.g. stress at the workplace) and (c) reconciliation of working

and non-working life are discussed. Within the following chapters B.3 to B.10, among

other things specific job quality issues, such as skills development and training (�

chapter 7), or certain issues in the context of health, for example, computer-based

work (�

chapter 5), are described in more detail.

42

B.2.1 Increasing flexibility and intensification of work

During the 1990s, the labour market in most industrialised countries became increas-

ingly flexible in terms of working time, work schedules, work location and work organi-

sation. Flexibility comes in many forms – internal and external, quantitative and quali-

tative (see table B.2.1 below). Whether modes of organisational flexibility are perceived

as positive or negative differs from worker to worker, yet these modes tend to reinforce

each other. Social protection in the sense of “flexicurity” concepts is therefore no

longer associated with one particular form of flexibility, but rather with an assortment of

different types of flexibility brought forth by interruptions in professional life. Such inter-

ruptions characteristically arise from periods of training, unemployment or domestic

work or follow periods of part-time or full-time working. In other cases a combination of

flexibilities can be found, such as when working part-time under a fixed-term contract

while teleworking under the same contract (European Foundation 2002: 13).

Table B.2.1: Di fferent forms of f lexibi lity

quantitative qualitative

external Employment status

• Permanent contract

• Fixed-term contract

• Temporary agency contract

• Seasonal work

• Ad hoc working

Numerical and/or contractual

flexibility

Production system

• Subcontracting

• Outsourcing

• Self-employed work

Productive and/or geographical

flexibility

internal Working hours and pay

• Reduction/adjustment of working

hours

• Part-time work

• Overtime/additional hours

• Shift work

• Night/weekend working

• Irregular/unpredictable hours

• Changes in pay (individualisation,

variable fraction, etc.)

Time and/or financial flexibility

Work organisation

• Job enrichment

• Teamwork/semi-autonomous teams

• Multitasking/multi-skilled

• Delegation of responsibilities

• Project groups

Functional and/or organisational

flexibility

Source: European Foundation 2002: 14

While flexibility has become a major indicator for new forms of work organisation, the

actual nature of work has changed, due largely to new technology and increased

commercial constraints, bringing workers into more direct contact with clients and

43

causing increased time pressure. On one hand, all of these changes towards more

knowledge-based work can lead to an increase in job satisfaction as work has become

more interesting. On the other hand, greater worker responsibility, an increase in multi-

skilling and work that both demands and provides more qualifications are not neces-

sarily resulting in improved working conditions; these aspects are indeed associated

with more intensive working, which can lead to greater frequency of stress and physi-

cal disorders as well as a higher on-the-job accident rate. The figure B.2.1 below of-

fering data from the Third European Survey on Working Conditions indicates that

working at a very high speed or under tight deadlines did in fact become more wide-

spread between 1990 and 2000. About 60% of the European workforce reports such

experiences. In addition, 21% of all respondents do not have enough time to do their

job. Approximately 30% of all European employees have little or no control over their

work tasks. This intensification affects all countries in the Union, all sectors of industry

and all occupational categories, whereas the increase has been sharper in some cases

than in others. These findings can be attributed first to shorter average working hours,

requiring work to be carried out faster; second, to working environments in which the

content of work has become more complex; third, to an increase in market pressures;

and fourth, to the reduction of the workforce as a result of restructuring and budgetary

constraints. According to the European Foundation (2002: 17), some studies reveal

that the intensification of work, and with it increased time pressure, comes at a price. It

is directly linked to the incidence of stress, backache, injuries and muscular pains in

the neck and shoulders.

Figure B. 2.1: Working at very high speed or under t ight deadlines

Source: Europ. Foundation 2002:17

The division of the workforce into core and peripheral staff or post-tayloristic and tay-

loristic workplaces can be verified for single countries (e.g. Germany, cf. Bosch 2000)

but holds also for global labour markets. For instance, the European Foundation (2002:

23) points to figures from Eurostat, revealing that the proportion of workers in more

highly skilled job categories (managers, professionals, technicians) increased signifi-

44

cantly between 1992 and 2000, from 31% to 36%. This increase reflects an overall

improvement in competence in the EU.

45

Figure B. 2.2: Employment gr owth by group of occupat ions in OECD count ries, av-

erage annual percentage change, 1992 – 1999

Source: OECD 2001: 14

The OECD also sees knowledge-intensive employment in the US and EU countries as

becoming increasingly important, since the number of jobs for scientists, engineers and

ICT specialists grew much faster than other types of employment between 1992 and

1999 (OECD 2001: 14). Hence, less skilled jobs tend to be replaced by technology or

transferred to low cost countries.

Today’s working life in flexible organisations is far too complex to be able to estimate

all possible repercussions on the quality of work and employment. Different groups

within the workforce can be confronted with completely different problems, e.g. highly

skilled workers compared to the less skilled. For example, in the case of knowledge

work among professionals, technicians or even clerks in sectors like ICT or consulting,

workers are increasingly being forced to accept responsibility for actively structuring

their own work and therefore also for the entire organisation of their everyday life. “As

boundaries of work relationships become blurred and management by objectives (in-

stead of instructions) is introduced, workers gain freedom of action, but have to pay for

this by taking on the duty of structuring their work in a way that enables them to cope

with it. This requires the re-establishment of routines on a personal level“ (STAR An-

nual Report 2001: 22).

Although overly simplified, it is useful to distinguish between two types of “flexible”

work organisation, both characterised by a high degree of decentralisation: (a) those

with a relatively low level of operator autonomy; relatively low qualifications and few

46

opportunities for learning on the job; compared to (b) those with a relatively high level

of operator autonomy, especially in the form of autonomous or semi-autonomous

groups; and relatively high qualifications as well as more opportunities for learning.

“Ultimately, then, the modernisation of work organisation, which means the establish-

ment of organisations based on increased decentralisation of functions and greater

flexibility of production, is not necessarily bringing about an improvement in working

conditions or the development of skills. Thus, not all flexible organisations are of the

‘learning’ type nor are making a contribution to social progress” (European Foundation

2002: 24).

B.2.2 Selected aspects of career and employment security

In all European Union nations except Denmark, Greece and Italy, a development away

from regular employment relationships and towards atypical ways of working (defined

as comprising self-employment, part-time and temporary work) is taking place. While

the picture (see table B.2.2. below) seems quite uniform when viewed from a distance,

the composition of the atypical labour force is, however, rather inhomogeneous: in

Austria, Belgium, France, Germany, Ireland, the Netherlands, the UK and the Nordic

countries, part-timers are much more numerous than the self-employed and temporary

workers. Spain has extremely high rates of temporary workers (a result of the dismissal

protection legislation in this country). In Portugal, self-employed, part-time and tempo-

rary workers occur in similar frequencies. In Greece and Italy, most atypical workers

are self-employed, whereas part-time work here is far below the EU average (Gareis

2001: 49).

Table B.2.2: Atypical forms of employment in the EU

in % of total labour force

1988 1998

Belgium 23.3 31.0

Denmark 29.1 28.3

Germany (West) 19.7 27.0

France 19.8 27.7

Greece 27.7 26.4

Ireland 17.2 24.5

Italy 25.2 19.5

Luxembourg 11.8 12.3

Netherlands 35.9 44.6

Portugal 25.8 30.1

Spain 31.1 39.6

United Kingdom 29.9 34.0

Finland n.a. 26.9

47

Austria n.a. 19.8

Sweden n.a. 32.7

Source: Gareis 2001, with data from Eurostat Labour Force Statistics and IAB

This trend towards atypical employment as a repercussion of higher flexibility does not

necessarily mean that individuals are be doomed to give into the hegemony of “the

market”. First, the labour market policy of any given nation together with personal pref-

erences (e.g. part-time) and national culture play a very important role in determining

the shape of atypical employment. Second, popular concepts of non-standard work

arrangements like “portfolio working”, freelancing or even “e-lancing” are attracting

disproportionate attention as compared to the numbers actually working in these ways.

Although most job holders will have to adapt to online relationships, working only on

the Internet will remain an exception. Instead, employees within traditional employment

relationships are being required to become more mobile, autonomous and self-reliant,

using the new technologies to keep in touch and to work. Thus, while change is taking

place within traditional dependent employment relationships, the stability and continuity

of employment structures have been underestimated (STAR Annual Report 2001: 22).

Third, job tenure has not declined, but stayed stagnant or has even increased in the

large majority of European countries. This is attributed to the necessity of preserving

know-how and the need for a working environment that supports innovative behaviour

of workers. Trust remains an essential element for efficient co-operation among work-

ing team members. Trust-building becomes difficult when relations between individuals

are merely temporary, this fact, in turn, limits the prospects for temporary virtual or-

ganisations taking hold in larger parts of the labour force (Gareis 2001: 51).

The picture of rising atypical employment on the one hand and stable average job ten-

ure on other hand can also be found in almost all OECD countries. An investigation by

the ILO on a large subset of OECD countries discovered that stability of employment

continues to be the dominant pattern. In 12 out of 16 countries, average job tenure was

stable or even increased between 1992 and 1998. Furthermore, the share of those

with tenure of less than 6 months, 1 year, and 5 years has actually decreased,

whereas tenure of more than 10 years has become more widespread. The latter group

now accounts for 40 per cent of the workforce across the 16 countries. While male

tenure has declined in several countries, this has usually been compensated for by an

increase in women’s job tenure. Even in the United States, noted for the flexibility and

diversity of its labour market, job tenure shows overall stability. Focusing on the aggre-

gate level might overlook where change is occurring. The study also gathered job ten-

ure data for specific sectorial and occupational categories and found little difference

from the overall picture of stability. ICT-intensive sectors such as storage, transport

and communication have higher job tenure than the overall average and, with some

exceptions, tenure in these sectors is increasing rather than decreasing. The pattern is

48

much the same in the financial intermediation sector, also a heavy user of ICT. Busi-

ness services show lower average tenure in all countries, but over the past three years

tenure has actually increased. Examining the new networking occupations, there is,

here too, little divergence from the overall average. It is likely that a closer look at very

specific labour markets, such as those of professional freelancers or the dot.com en-

trepreneurs, would show much greater instability. But these groups are still only a

small minority of the workforce (ILO 2001: 112 to 115).

Despite the incidence of employment stability in OECD-countries there is evidence for

the division of labour into core and peripheral staff. Firms in a competitive, high-tech

environment, where high-performance work systems with flatter hierarchies and teams

are in place, depend on their skilled workforce. Evidence shows that performance is

negatively affected by qualified workers quitting. Hence, whenever investment in em-

ployee skills is important, interest in the retention and use of those skills rises, because

otherwise search and training costs for replacing workers are incurred. It is only when

these costs are not important that tenure also becomes less important. For example,

firms that rely on pools of unskilled labour in locations where such labour abounds

might prefer the lower wage costs incurred by high turnover to the longer tenure of

their staff. Hence, non-skilled or semi-skilled workers in industrialised economies and

also larger parts of the workforce in developing countries are more likely to be pushed

towards joining the contingent workforce.

Case study: employee profiles in contact centres - United Kingdom

Contact (call) centres have been some of the fastest growing workplaces in the United

Kingdom in the last five years. Almost two percent of the working population are cur-

rently employed in call centres. Call-centre employees can be grouped into two catego-

ries:

• The Pre-Careers, aged from 18 to 30; they are often students, college-leavers or

graduates. Many students look for work which they can balance with their studies.

Call centres offer a flexibility of hours ideal for them. This group of employees has

the opportunity to rise within the organisation and the rate of progression is much

more rapid than in other industries.

• The Converts, who joined by chance or not thinking they would like the work; this

group seems to have the highest retention rate. One reason is their higher average

age and, as more employers recognise the value of targeting this group of potential

employees, this age group will increase within call centres. The current average

age is 27.

A total of 67 per cent of employees are women, and this is also reflected in the per-

centage of women managers in contact centres. They offer women a career in which

they can rise through the ranks without hitting the “glass ceiling” as in other profes-

sions. Fifty per cent of attrition is attributed to redeployment within the company, thus

49

implying that anywhere of up to 50 per cent of employees successfully manages to

work their way up within their company.

But the picture is not only positive, as working conditions in call centres can

vary greatly, depending to a large extent on the type of work being performed. Ac-

cording to a survey by International Call Centre Benchmarking covering 205 call cen-

tres with over 26,000 workplaces in Europe, USA, South Africa, the Middle East, South

East Asia and Australia, staff absenteeism increased from 4.7% to 6.1% in 1997-1998.Source: ILO 2001: 129; Di Martinho 2001: 101

B.2.3 Selected aspects of occupational health and safety

Over the past decades, common concern over job stress has been growing in industri-

alised countries. Stress is seen as the perceived imbalance between internal and ex-

ternal demands facing the individual and the perceived ability to cope with the situa-

tion. Whereas physical burdens are being more and more reduced by traditional OHS

measures and the shift towards white collar work, new health risks are arising as a

result of the intensification of work. Nowadays, mental stress coming from time pres-

sure, information overload or so called “trans-border stress”, caused by collaboration

with co-workers speaking different languages or working across different time zones, is

typical for knowledge workers.

A number of studies have determined the extent of stress at work in industrialised

economies:

• Studies from the U.S. indicate that 40% of workers perceive their job as very or

extremely stressful (National Institute for Occupational Safety and Health2.

• The “Bristol Stress and Health at Work Study” (2000)3 indicates for the U.K. that

about one in five workers reports either being very or extremely stressed by work.

This amounts to about 5 million workers in the U.K. The report points out a correla-

tion between reports of being very stressed and a range of job-design factors, such

as work overload and the lack of support by managers.

• According to the Third European survey on working conditions (cf. Paoli and Merllié

2001), stress is one of the most common work-related health problems in the

European Union. 28% of employees feel that their work causes stress, whilst

among the respondents “professionals” (40%) and “technicians” (35%) are most

strongly affected by stress. Not surprisingly, people that work at high speed all the

time or almost all of the time, report greater stress (as well as other health prob-

lems, see table B.2.3) compared to those who almost never or never are con-

fronted with intensive work.

2 http://www.cdc.gov/niosh/stresswk.html (04-04-2002)

3 http://www.hse.gov.uk/research/crr_pdf/2000/crr00265.pdf (04-04-2002)

50

Table B.2.3: Health problems due to high speed work vs. less intensive work in the

EU

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Furthermore, a study by the ILO (2001b: 12) presents evidence for occupational stress

being a significant problem even in newly industrialised countries or in the developing

world:

• A large random sample of Taiwanese workers concluded that the Taiwanese

displayed worse physical health than British industrial workers. This finding was

confirmed in a recent study of Taiwanese managers who not only perceived stress

to a larger degree than the general workforce, they were also more stressed than

comparative samples form Hong Kong, the UK and Germany.

• In a study of Brazilian white collar workers, it was found that Brazilian workers had

higher levels of stress and were faced with more sources of stress than a

comparison group from the UK.

Predictors of stress

Summarising the results of key literature,4 the following characteristics of work are

seen as the most relevant predictors of stress:

• Design of task: heavy workload, infrequent rest breaks, long working hours and

shift-work, semi-skilled or unskilled work;

4 See NIOSH http://www.cdc.gov/niosh/stresswk.html; European Agency for Safety and Health at Work 2000; ILO 2001.

51

• Management style: lack of participation in decision-making, poor communication,

lack of family-friendly policy;

• Interpersonal relationships: poor social environment and lack of support;

• Work roles: conflicting or uncertain job expectations, too much responsibility;

• Career concern: job insecurity and lack of opportunity for growth or promotion,

status incongruity.

In addition to these problems, there are other sources of stress recently having re-

ceived considerable attention, namely workplace violence or violent acts involving (a)

bullying/mobbing or (b) sexual and racial harassment. The phenomena of violence and

harassment at work is seen as a logical consequence of increased time pressure and

work intensity.

• Typical behaviour patterns falling under the category of bullying/mobbing are with-

holding information, attempting to find fault with someone’s work, public humiliation

and social exclusion or isolation. In the Third European Survey on Working Condi-

tions based on 21,500 face-to-face interviews with employees in the EU, 9% re-

ported that they were exposed to intimidation and bullying. The report estimates

that at least 10% of employees in a global company group can be considered as

being currently subjected to bullying.

• As in the case for workplace bullying, sexual and racial harassment may also be

considered a workplace social stressor. According to the ILO report (2001b: 22),

some evidence exists suggesting that women from ethnic minorities are most vul-

nerable to sexual harassment. The UK Commission for Racial Equality (CRE) has

watched with mounting concern as the number of cases of racial harassment at

work reaching the industrial tribunals has increased every year. Relevant studies,

published by the ILO (2001b: 23f), show the extent of both sexual and racial har-

assment at work:

• In a study of “ethnic harassment” in the US (defined as verbal abuse and exclu-

sionary conduct due to ethnicity) among four samples of Hispanic employees in di-

verse contexts, 40-70% reported having experienced such behaviour within the last

24 months.

• 2% of workers within the EU reported that they were subjected to sexual harass-

ment.

• A large-scale German survey undertaken by the Federal Institute of Occupational

Health and Safety concluded that more than 90% of women had experienced sex-

ual harassment at work during their working lives.

• In countries where religious and cultural beliefs oppose women working, any re-

ported experience of physical or sexual harassment is unlikely to be taken seri-

ously.

52

Costs of stress at work

Cooper et al (1996, cited in ILO 2001b) suggest that the typical outcomes of stress

among others are: impaired performance and productivity; greater absenteeism due to

sickness; higher fluctuation rates; unsafe behaviour and increased propensity for acci-

dents; a reduction in job satisfaction; a poor workplace morale; and less commitment to

the organisation. Moreover, stress can manifest itself in anxiety and irritability which, in

turn, may influence social relationships at work. Hence, it should be obvious that

stress-related effects result in costs for the individual, organisation and society. The

ILO report (2001b: 42ff) refers to an assessment of the costs of stress/harassment at

work to the organisation. Including other categories such as impact of long hours, lack

of commitment, personal problems and poor workplace morale, the ILO estimates that

approximately 40% of all absenteeism could be attributed to stress. With respect to the

cost of stress and violence to society, the ILO estimates that this amounts to approxi-

mately 0.5 – 3.5% of the GDP per year.

Workplace health promotion – a holistic approach to interve ntion

Bearing in mind the existing problems and trends already outlined, occupational health

management face the challenge of moving forward from reparation/compensation to

prevention. By emphasising the potential costs to an organisation, organisations

should be motivated to invest time and money in the prevention of stress and thus pro-

vide health promotion. Hence, organisational stress management intervention as well

as policies such as information, consultation and participation of employees are fun-

damental elements in successful stress-prevention strategies.

Traditional OHS has significantly improved health in the workplace by reducing acci-

dents and preventing occupational diseases. However, it has become obvious that

OHS alone cannot address the wide range of psycho-social issues mentioned above.

Applicable guidelines for Workplace Health Promotion (WHP) are defined within the

“Luxembourg Declaration on Workplace Health Promotion in the European Union” that

was endorsed by all European Union Member States in 1997. These principles refer to

a “modern corporate strategy which aims at preventing ill-health at work (including

work-related disease, accidents, injuries, occupational diseases and stress) and en-

hancing health-promoting potentials and well-being in the workforce”5. The guidelines

of a successful WHP are:

• All staff members have to be involved (participation);

• WHP has to be integrated in all important decisions and in all areas of organisa-

tions (integration);

5 http://www.baua.de/part/whp/publ.htm (11-04-2002)

53

• All measures and programmes have to be oriented to problem-solving cycles:

needs analysis, setting priorities, planning, implementation, continuous control and

evaluation (project management);

• WHP includes individual-directed and environment-directed measures from various

fields; it combines the strategy of risk reduction with the strategy of the develop-

ment of protection factors and health potentials (comprehensiveness).

Case study: WHP at DuPont, Netherlands, Location: Dordrecht (chemical industry,

1,500 employees)

Convinced that a company can no longer survive nowadays without workplace health

promotion, DuPont assigned responsibility for the health sector to the management.

DuPont has developed the so-called “Wellness Checkpoint” in order to analyse the

health and well-being of its employees.

• The employees can thus assess the health risks in their jobs and their lifestyles

and, based on this, develop strategies for change.

• The “Safety Off-the-job Commission”, a working group with representatives from

every department, looks after the welfare of the staff – even outside of working

hours.

• The employees are involved by making suggestions to the company within its im-

provement scheme.

• All employees are to undergo further training at least six days every year in order to

be able to cope with future requirements.

• Medical examinations, assistance with drug and alcohol problems, healthy food in

the canteen, stop-smoking programmes, stress management courses, sports and

relaxation opportunities, and many other activities are a matter of course at

DuPont.

• There are schemes for particular risk groups, such as shift workers.

• DuPont evaluates all WHP measures, and the management is kept informed of

plans and results.

The list of successes is very long: job satisfaction and the working atmosphere have

improved as a result of better working conditions and changes in the style of leader-

ship. The high implementation rate of suggestions for improvement submitted by em-

ployees has contributed to improved health and satisfaction. On the profit side, the

company has saved roughly one million euros, increased productivity, gained a more

attractive image and recorded a lower staff fluctuation. Absenteeism has fallen by 0.5%

since 1994, and the accident rate is only one tenth of the average for the chemical in-

dustry.Source: BKK Bundesverband 1999: 51

54

Case study: WHP at Nokia, Finland (21,000 employees)

Customer satisfaction, respect for the individual, achievement and continuous learning

are treated as fundamental values at Nokia. The company has started a “Total Well-

ness Programme” for employees with the aim of creating health-promoting working

conditions and which includes all other areas of life. The programme was developed in

co-operation with the Finnish Institute of Occupational Health and Safety. The human

resources and occupational medicine department are responsible for workplace health

promotion and prevention programmes. The company promotes numerous cultural and

social activities for employees and organises, for example, literature reading sessions,

theatre performances and parties. The company uses its own statistics on working

days lost due to illness, industrial accidents and occupational diseases as well as data

on staff satisfaction and employee health as a basis for planning health promotion

projects. As part of a fitness survey, employees are assessed on a scale from one to

five on health-related aspects such as work, physical condition, ability to cope with

stress, family life, social contacts and hobbies. Stress at work, health and qualifications

are on the agenda in the annual “development discussion” between superiors and em-

ployees. Great emphasis is placed on gaining further professional qualifications. Nokia

has established its own global learning centre network. The company regularly evalu-

ates participation in the wellness programme and other WHP activities. If the results

are positive, successful activities are extended to the rest of the company.Source: BKK Bundesverband 1999: 52

B.2.4 Selected aspects of reconciling working and non-working life

According to figures from the Third European Survey on Working Conditions, average

working hours in the EU are falling. In 2000, these averaged 38.2 hours per week for

all workers and 36.7 hours for employees only, a reduction mainly arising from an in-

crease in the proportion of those working part-time. However, these averages conceal

significant extremes. Thus, while 17% work part-time, this category includes 32%

women but only 7% men. Part-time work is also more widespread in some countries

than in others. While 33% of the population work part-time in the Netherlands, where it

can be said that there is a culture of working part-time among women, part-timers ac-

count for as few as 5% in Greece. Twenty percent of the entire European workforce

worked more than 45 hours in 2000 (men: 27%, women: 11%). One third of all workers

are affected at some stage by long working days (more than 10 hours per day), mainly

male workers in managerial and professional jobs and self-employed.

In contrast to this slight reduction in average working hours per week, flexibility in

terms of variability and reduced predictability of working hours is rising. 19% of all em-

ployees work at least one night a month, 47% at least one Saturday a month and 24%

55

at least one Sunday a month. 37% of all employees do not work the same number of

days each week and 24% have different working weeks within one month. Forty-one

percent have fluctuating daily work schedules, 22% of all employees do shift work. For

19% of the workers in this survey, working time flexibility does not fit with family and

social commitments (Paoli and Merllié 2001: 20ff).

For many people, the working day does not end when paid work ends. A second

working day with domestic work often begins at home (household tasks, education of

children, care of elderly/dependent relatives etc.). Not surprisingly, this double work-

load is still distributed in a completely unbalanced way between men and women (the

same holds true for income levels). Women are generally required to juggle the de-

mands of their jobs on the one hand and domestic tasks and caring for children and

other relatives on the other, as Table B.2.4 reveals.

Table B.2.4: Who does what at home in EU 15 (% of respondents performing the

task for 1 hour or more every day)

At home, who: Women Men

Takes care of the children and their education? 41 24

Does the cooking? 64 13

Does the house-work? 63 12


Table B.2.5: Income l evels in EU 15 classified by gender (%)

Income level Women Men Total

Low 26 9 16

Low-medium 24 19 21

Medium-high 17 22 20

High 10 22 17

No answer 23 29 26


Making it easier to reconcile working and non-working life is an essential aspect, both

for encouraging entry into the labour market and for enabling people to remain at work;

this must be seen against the demographic background of an ageing population and

an increasing number of single-parent families. It is a question of being able to remain

at work despite the changes in one’s private life (motherhood or fatherhood, training,

sabbaticals, etc.) on the one hand and being able to carry out non-work-related tasks

and obligations while maintaining a job on the other (leisure, activities, child-rearing,

temporary/permanent care of dependants, etc.). Thus, companies, too, are being

looked to for programmes addressing the work-life balance, on the one hand in to or-

der to better be able to reconcile paid work and domestic work while maintaining a

56

gender perspective on equal opportunities, and on the other hand in order to improve

job quality by reducing stress and burn-out due to the intensification of workloads.

Case study: Procter & Gamble Germany newly receives award for equal oppo r-

tunity and corporate culture

For the second time since 1999, on May 6 2002 Proctor & Gamble Germany received

the TOTAL E-QUALITY award for helping employees better reconcile family and job

obligations (http://www.total-e-quality.de). Being able to reconcile family life and career

demands is ensured by flexible working hours geared toward the individual’s personal

life situation. For the last five years, this award has been bestowed on companies

which pursue and successfully realise the goal of achieving equal opportunity for

women and men.

Beyond meeting legal requirements, Procter & Gamble’s initiative has intro-

duced teleworking positions, sabbaticals, shortened working hours as well as a job-

sharing model. Of course, flexibility and mobility among employees also play important

roles in the programme, too. To this end the company ensures its staff of a high degree

of personal flexibility by means of family and childcare facilities during business trips

along with special support for spouses working apart from each other while one of

them is abroad for a period of time due to business reasons. Employees with children

benefit from the company working together with a private agency which co-operates

with municipalities in brokering childcare services. Harmonising the demands of fami-

lies and jobs is facilitated by an array of child-care options, including kindergartens and

contacts to care-givers and day-care centres.

Measures taken to ensure equal opportunity for women and men within the

company are also innovative. These are based on the insight that Proctor & Gamble’s

potential lies in the diverse talents, abilities and qualifications of its individual employ-

ees. In this connection, successful co-operation among people from different nations

and cultures and with a variety of mother tongues is viewed as a prerequisite to being

innovative and competing on the market. For this reason, utilising this diversity is one

of the main tasks which the entire management at Proctor & Gamble has been en-

trusted with. A far-reaching action plan for equal opportunity was enacted in 1997 and

in the face of employees’ needs has continued to be further developed ever since. This

programme has been developed in accord with the company’s statement of basic val-

ues. The objective stands of sensitising all employees to this vital issue. To this end,

Procter & Gamble Germany has established a Women in Business Team. This con-

sists of a group made up of men and women from all departments of the company who

are dedicated to enacting the Diversity Programme. They do this, for example, by de-

livering presentations and workshops aiming to clarify the concept of diversity. Another

aspect of these diversity efforts are various internal and external mentoring pro-

grammes.Source: http://www.procterundgamble.de

57

Can e-work increase the reconciliation of working and non-working life?

Within the FAMILIES project (www.families-project.com) about 100 in-depth case

studies concerning how, from families’ point of view, e-working affects work-family is-

sues have been carried out in four countries (Ireland, Italy, Germany and Denmark).

According to a taxonomy of individual e-work arrangements in time and place (cf. fig-

ure B.2.2 below) and different family types (i.e. couple with or without children, single

parent family etc.) a broad variety of different patterns was examined.

In spite of the considerable diversity in work and family patterns, the study reveals that

the flexibility in time and place provided by e-working can offer new solutions to the

current repertoire of family-friendly options. Many of the cases show how e-work can

increase flexibility, degrees of freedom and balance between work and family life (e.g.

suitable care for children or for dependents; ability to get back into the workforce after

absence due to family reasons, etc.). Yet other cases show that there is sometimes

only little choice involved, because e-work is part of the job and can thereby have

negative implications for family life (e.g. on-call work, shift-working or because of after-

hours extensification through working from home). Moreover, the cases show how

central gender is, i.e. women are more likely to adopt e-working from home for family

reasons and men are more likely to do it for personal or work-related reasons. When

compromises have to be made to meet family needs, the cases suggest that women

are more likely to be the ones whose situations are affected in a negative way, for ex-

ample, by having to accept negative career implications or social isolation.

Figure B. 2.2: Taxonomy of e-work arrangements in ti me and place

Typical place Atypical place

Typical time • IT changes the way work

is done in conventional

settings at conventional

times

• Home-based telework “9-

to-5”

• Mobile tele-work “9-to-5”

• Neighbourhood work cen-

tre “9-to-5”

Atypical time • Shift-work in conventional

settings enabled/induced

by IT (e.g. call centre

work)

• Home-based telework

(atypical times)

• On-call work at home or

mobile (night, weekend,

etc.)

Source: Families 2002: 2

Hence, whether e-work modes are suitable depends on the freedom of choice and

specific family requirements. The benefits are not realised automatically, however. E-

work, especially home-based work, without support structures can only seldom be re-

58

garded as a good solution per se. “Supports that are needed include wider availability

of suitable childcare and eldercare services, more consideration of family needs in the

design of e-working arrangements, better preparation of e-workers and their families by

employers and by the educational system (workers need technical and self-

management skills, families need to be prepared for the changes associated with e-

working), and more awareness and understanding by everyone (family members,

neighbours, employers and work colleagues) of what e-working involves and of its le-

gitimacy as ‘real‘ work” (Families 2002, summary).

B.2.5 Some formulations from existing codes of conduct

Company Code of Royal KPN N.V.

KPN supports employees in their career development, ensuring that the work they do

remains challenging and stimulating. Every employee has the opportunity to develop

and keep pace with the changes and expansions that occur in the company. KPN

guarantees safe, healthy working conditions and we believe it is important for employ-

ees to strike the right balance between work and life. Our employees enjoy favourable,

competitive conditions of employment and are treated with respect. At KPN, intimida-

tion and discrimination are unacceptable.

Motorola, Code of Business Conduct

We are all responsible for maintaining a safe workplace by following safety and health

rules and practices. We are responsible for immediately reporting accidents, injuries,

and unsafe equipment, practices or conditions to a supervisor or other designated per-

son. Motorola is committed to keeping its workplace free from hazards. In order to

protect the safety of all employees, each of us must report to work free from the influ-

ence of any substance that could prevent us from conducting work activities safely and

effectively. Threats or acts of violence or physical intimidation are prohibited.

Nokia, Code of Conduct

Nokia employees must strive to respect and encourage teamwork, and the strength

that comes from diversity. Nokia will strive to pay fair compensation, and promote a

safe and healthy workplace. Nokia will not discriminate on any of the grounds univer-

sally recognised as arbitrary. Nokia will continue to encourage equal opportunity as a

key part of the “Nokia Way”. Nokia will continue to invest in the personal and profes-

sional learning and growth of Nokia’s employees. Nokia will encourage its employees

to lead balanced personal and professional lives.

Telefónica, Code of Conduct

UNI and Telefónica confirm their support and respect for applicable standards for the

environment, security, and health and safety at the workplace. That is:

59

• The guarantee that work places are safe and do not imply risk for the secu-

rity and health of workers (ILO Convention 155). Best occupational health

and safety practice shall be observed, safety equipment shall be provided

when necessary to prevent, as much as possible, accident hazards and

harmful effects for health.• The co-operation of workers and their representatives for the observance of the

adopted measures to guarantee health and security and these will receive the ap-

propriate information and training in the area of occupational health and safety.

60

B.3 Electronic Monitoring and Data Protection

The changes in working life brought about through computer-related technology in-

clude the area of work surveillance and performance monitoring: Computers, together

with a growing supply of monitoring software, allow new ways of tracing what employ-

ees do when at work, e.g. assessing the number of their keystrokes per period of time,

the time they spend at and away from the computer, and the files they process, in-

cluding both websites they visit and e-mails they send and receive. Moreover, the

computerisation of telephone systems has faciliated the monitoring of employees’ tele-

phone communication, e.g. by assessing the length of phone calls, the numbers dialed,

the time spent between calls and also the calls’ content. These new possibilities of

monitoring and surveillance presumably are of special relevance for e-work and e-

collaboration arrangements, as both are characterised by a varying degree of em-

ployee remoteness from the company unit responsible for their supervision, which pre-

vents traditional ways of employee monitoring, like observing the amount of time spent

at the office or personally checking what an employee is doing, from being applied.

Moreover, e-work and e-collaboration arrangements are particularly frequent in occu-

pational fields that are most susceptible to electronic monitoring, including data and

word processing, and call center work.

We therefore take a closer look at the topic and review empirical and discursive mate-

rial from existing social science literature, public discussions and our own interviews

with experts and stakeholders, attempting conclusions for e-work and e-collaboration.

B.3.1 Information available through Electronic Monitoring

While it is beyond the scope of this paper to review the technical dimension of elec-

tronic performance monitoring and work surveillance in an extensive way, we briefly

sum up what kinds of work-related information may be gathered given the present

technical possibilities.

The first level of assessment technically enabled pertains to aggregated work-related

quantities, i.e. the time an employee spends at the computer or on the phone, the

number of keystrokes or calls he makes, and similar, more task-specific quantities. In

the case of computers, a personal log-in procedure suffices to allow a time-

assessment; for telephone communication, the total calling time is reported in most

telephone bills – although this does not allow to single out the calling time for sub-

periods like days or weeks. To assess the number of computer keystrokes, special

software packages are necessary.

61

A more specific kind of information is provided by the so-called“traffic-data” of online

and telephone communication, i.e. the names of files processed and websites visited,

the senders and adressees of e-mails, the length of particular calls and the numbers

dialed. For common data files like Word documents or Excel sheets, traffic data con-

sisting of the file name and information on when and by whom it was accessed can be

obtained through the company network’s file server, provided that files are stored in a

common network directory accessed through personal log-in. Information concerning

web- and e-mail-related traffic is provided by so-called log-files, scripts containing what

websites were visited, where e-mails were sent to and wherefrom received, all data

related to time. Such files are created and stored by the company’s mail- and web-

server. Telephone-related traffic data indicating what numbers were called when and

how long the calls took can be obtained through a device called a “pen register”. Traffic

data can either be evaluated through ordinary search functions offered by standard

software or by special software packages, including Win What Where, WebSense,

Dynamark, Net Access Manager, and LittleBrother 1.2.

A further increase in information density can be achieved through tools granting access

to the content of files, websites, e-mails and phone calls. For a data file, this can most

easily be accomplished if the file is stored in a common network directory, thus being

accessible for all entitled to log onto it. To review the content of visited websites, it suf-

fices to know their URL which, as already mentioned, is being stored in the logfile. For

websites, the collection of traffic data therefore already includes the possibility to ac-

cess their contents. Sent and received e-mail messages can be accessed through the

company’s mail-server, even after they have been deleted by the employee. It is also

possible to automatically send a copy of all messages an employee processes to a

database intended for monitoring without the employee noticing. To listen-in on tele-

phone calls, special technical facilities are required. Again, the collected content-

related data can be evaluated and analysed by various search functions provided by

standard and special, possibly customised software.

B.3.2 Relevant legislation

What legal regulations apply to the three categories of computer-based monitoring just

identified? To which extent do they indicate what category may or may not be applied

under which circumstances? To our knowledge, none of the monitoring categories is

up to now generally precluded or specially restricted anywhere in the world. There are,

however, considerable differences regarding the regulation of circumstances under

which monitoring measures may be taken, and also concerning the tendencies of the

relevant jurisdiction.

62

USA

In the United States, there is up to now no federal legislation that explicitly adresses

the application of computer-based performance monitoring and work surveillance. The

jurisdiction applying general laws to monitoring issues however almost entirely decided

against any limits of application, as case-related evidence indicates (e.g. Bourke vs.

Nissan, Shoars vs. Epson, Smyth vs. Pillsbury, see Julian/Weiss 1999 and

www.privacyrights.org for details). Thus, employers may perform all categories of

monitoring, including the evaluation of phone-call and e-mail-contents, without inform-

ing the employee or observing any other restricting legal principle. The only exception

is that in California, listening-in on calls has to be indicated.

EU

In the European Union, the application of performance monitoring and work surveil-

lance measures faces the requirements stated in the EU Directive on Data Protection

(Directive 95/46/EC – European Commission 1995). These requirements include indi-

vidual rights to

• procession of personal data only if certain specified reasons – including individual

consent and “legitimate interests pursued by the controller” – apply (Article 7),

• accordance with the principles of finality,6 legitimacy7 and proportionality8 in the

procession of personal data,

• be informed about what kind of personal data are collected, by whom and for what

purpose (principle of transparency),

• to rectify incomplete or incorrect personal data collected,

• to protection of sensitive personal data, except if legitimate reasons apply.

• to have their personal data transfered to third countries except where the country in

question ensures an “adequate level of protection” (Article 25).

These common minimum standards – some of which were already included in the

OECD’s data protection principles (OECD 1980) – are complemented by differing na-

tional legislations and jurisdictions in the different EU countries. Just two examples for

national standards that go beyond the directive’s requirements and imply a special

restriction for the monitoring of contents: In Austrian jurisdiction, the general protection

of the individual personality is interpreted as precluding the recording and evaluation of

the content of job-related calls except during trial periods. Secondly, the German juris-

diction has shown a tendency to extend the German personality protection to the

monitoring of e-mail-contents. A corresponding law concerning the privacy of e-mails at

6 Finality means that personal data may only be used for the purpose they were collected for.

7 Legitimacy means general compliance with the legislation in force.

8 Means that the amount of personal data collection must not be “excessive in relation to the purposes

for which they are collected and/or further processed.” (European commission 2001c, 21)

63

work has been announced by the German government, but not yet realised.9 The

emergence of special restrictions concerning particular categories of monitoring for the

whole European Union in the future depends largely on the forthcoming EU directive

on workplace monitoring and surveillance that is currently worked out and expected for

2003 (see European commission 2001c, 25).

Non-western countries

In recent years, several countries outside the Western world have adopted new legis-

lation concerning privacy and personal data protection that resembles the EU’s data

protection principles (see www.privacyinternational.org, www.privacyexchange.org).

This has been described as an indirect result of the EU’s data protection directive,

which as mentioned above forbids the transfer of personal data in non EU countries

unless they secure “adequate protection”.

• The Malaysian Government has drafted a new legislation on personal data protec-

tion in Fall 2000 before presenting it to the Parliament in the middle of 2001.

• The Hongkong data protection principles are comparable to the European ones.

There is a data privacy comissioner (see www.pco.org.hk) who issued a Code of

Practice for Employee Monitoring and Personal Data Privacy at Work in 2002.

• Taiwan enacted the Computer-Processed Personal Data Protection Law on August

11, 1995 to "regulate the computerized processing of personal data so as to avoid

any infringement of the rights appertaining to an individual's personality and facili-

tate reasonable use of personal data." Data may only be collected within the scope

of necessity for official purposes, with the written consent of the concerned party,

and granting that no potential harm will be done to the rights and interests of the

concerned party.

• In India and the rest of Asia, there is no legal personal data protection based on the

European model. The European Union general data protection directive is however

expected to also have an impact on India and other Asian countries in the future.

• The Chilean Act on the Protection of Personal Data took effect on August 28, 1999.

The Act is the first of its kind in Latin America and contains principles similar to

some of those stated in the EU’s Data Protection Directive (information, consent,

legitimacy, finality, data access). It does however not provide for the establishment

of an independent data protection agency. Instead, unresolved complaints are to

be handled by the regular court system. There is no general registration require-

ment for data controllers.

• In 2000, the Argentinian parliament set the “Personal Data Protection Act” in force,

a law that is quite similar to the Chilenian one.

• In Africa, legislation related to privacy and data protection does only exist in South

Africa (Access to Information Law from 1997).

9 see www.wired.com/news/politics/0,1283,39610,00.html

64

B.3.3 Actual use of Electronic Monitoring

Given the considerable amount of possibilities to electronically monitor employees’

work behaviour and work performance, and given the current state of their legal regu-

lation just reviewed, it appears desirable to estimate the extent to which these possi-

bilities are actually used by employers – are they already common components of eve-

ryday worklife or still rather marginal phenomenons applied only by the most cautious

employer percentile?

Such questions call for quantitative data. Unfortunately, no such data have yet been

collected for the European Union. Table B.3.1 shows U.S. figures collected through

surveys of managers by the American Management Association:

Table B.3.1 Electroni c Perf ormance Moni toring in U. S. companies

1997 1998 1999 2000 2001

Content-related mon i-

toring:

Recording & review of

telephone conversations

10.4 % 11.2 % 10.6 % 11.5 % 11.9 %

Storage & review of voice

mail messages

5.3 % 5.3 % 5.8 % 6.8 % 7.8 %

Storage & review of e-mail

messages

13.7 % 19.6 % 21.4 % 30.8 % 36.1 %

Monitoring Internet con-

nections

Not asked Not asked Not asked 54.1 % 62.8 %

Video recording of em-

ployee job performance

15.7 % 15.6 % 16.1 % 14.6 % 15.2 %

Monitoring of traffic

data:

Telephone use (time

spent, numbers called)

34.4 % 40.2 % 38.6 % 44.0 % 43.3 %

Computer use (time

logged on, keystroke

counts etc.)

16.1 % 15.9 % 15.2 % 19.4 % 18.9 %

Video surveillance for se-

curity purposes

33.7 % 32.7 % 32.8 % 35.3 % 37.7 %

Total, all forms of elec-

tronic monitoring and/or

surveillance

63.4 % 67.1 % 67.3 %

Including Internet Moni-

toring

78.4 % 82.2 %

65

Excluding Internet Moni-

toring, as in years previous

to 2000

73.4 % 77.1 %

Source: American Management Association 2001

The data indicate that the amount of electronic monitoring and work surveillance has

been increasing for all kinds of communication during recent years, most strikingly for

e-mail and internet use. Vorvoreanu and Botan thus noted an “explosion of electronic

monitoring and surveillance in the American workplace” (Vorvoreanu/Botan 2000: 3).

With more than two thirds of all employers monitoring internet use, one third employee

e-mails and more than forty percent reviewing telephone traffic data, electronic per-

formance monitoring and work surveillance can hardly be classified as marginal, but

rather as increasingly common.

This impression is reinforced by data from a Texan survey of 98 managers (see

Houston/Barnes/Keene 1999), of which two thirds reported that their companies en-

gaged in some type of electronic monitoring. In 18 percent of these companies, em-

ployees were not informed about when and how they were monitored. According to a

study released by the Denver-based Privacy Foundation, 14 million employees, or just

over one-third of the online workforce in the U.S., have their Internet or e-mail use

monitored by their employers. Worldwide, the number of employees under such sur-

veillance is estimated about 27 million. Within the past few years, employee monitor-

ing, as measured by the sales of surveillance software, has increased at least twice as

fast as the number of U.S. employees with Internet access, according to the study. In

a n a n n u a l s u r v e y d o n e i n H o n g k o n g ( s e e

www.pco.org.hk/english/publications/newsletter_2000aug.html), 64% of the respondent

organisations had installed at least one type of surveillance facilities in the workplace,

which included closed circuit TV (48%) and devices for monitoring employees' com-

puter use (27%), web-browsing (23%), phone (22%) and e-mail (21%). Only 18% of

these organisations had formulated a written policy on such activities. 35% of respon-

dents did not even know whether such a policy existed.

B.3.4 Reasons for and effects of Electronic Monitoring

We will now turn from a descriptive to a more causal kind of evidence: Knowing – or,

for Europe, at least assuming – that computer-based techniques of performance

monitoring and work surveillance are becoming increasingly common among employ-

ers, two questions appear relevant: (1) What reasons employers give for employing

certain ways of monitoring, and (2) what is yet known about the effects electronic per-

formance monitoring and work surveillance have on employee performance and work

satisfaction.

66

Employers’ reasons to monitor

In a paper on work surveillance in the context of teleworking in Great Britain, Ben Fair-

weather mentions three reasons for electronic monitoring as given by employers (Fair-

weather 1999). First, the fear that the company’s communication facilities may be mis-

used by employees for illegal activities, e.g. disclosing secretive company information,

accessing websites that contain illegal content, or sending offensive e-mails. In the

United States, this fear is reinforced by precedent jurisdiction cases implying a high

degree of companies’ liability for the web-related behaviour of their employees. The

corresponding data in the AMA US manager survey already mentioned above reflect

this, as “legal liability” was most often mentioned as rationale behind monitoring (68.3

%). The closely related reasons “security concerns” and “legal compliance” obtained

the second- and third-highest score (60 % and 50.1 %). Misuse of communication fa-

cilities can of course also be related to productivity: It is feared that people would be

seduced to excessively use the phone, the computer in general, or especially the inter-

net for pursuing their private interests on company resources and company time if they

were not monitored. Consequently, 45.5 percent of the managers in the AMA survey

mentioned “productivity measurement” as a reason for their electronic employee

monitoring.

The second reason for electronic monitoring Fairweather mentions is quality control:

Communication with customers is an important part of many jobs, especially in sales-

connected departments and call centers. Therefore, many employers claim a necessity

to monitor their employees’ communication in order to secure the quality of their serv-

ices. In the AMA survey, 45.3 percent gave “performance review” as a reason of their

monitoring activity.

Thirdly, Fairweather points out that many employers also claim a right to monitor their

employees by whatever means and for whatever reason simply because they own the

companies’ communication facilities. This claim has been acknowlegded several times

by the US jurisdiction. In the EU countries, it seems to be more common to grant em-

ployers the right to limit or completely preclude private communication through com-

pany facilities while at the same time forbidding them to monitor its contents as this

would affect the employee’s personality protection (see chapter B.3.2 above).

Case Study: Content monitoring without employee notification at an Amer ican

retail brokerage firm

At the focal company, employees’ e-mails were stored for potential review without any

notice given to them. At the same time, the employees were encouraged to use mailing

as a means of informally communicating with their colleagues. After an insider trading

scandal, it was decided to screen all employees’ mails routinely and based on acci-

67

dental sampling, again without their knowledge or consent. It was detected that one

female employee had frequently exchanged gossipy mails with a colleague, a finding

that was strongly critisised in her performance review and had consequences for her

salary increment. The employee was shocked by this, having believed that her privacy

would be protected, which she communicated to her supervisor. He discussed a

change of e-mail policy with the management, but the option to inform employees

about their mails being monitored was estimated to inhibit their use of e-mail as a

means of informal communication, which in turn would decrease the productivity gains

attributed to this use.Source: Spinello 1997: 61

An additional reason neither mentioned by Fairweather nor asked for in the AMA sur-

vey, but mentioned in an expert interview with an official of Austria’s Union of Salaried

Employees (GPA) is that in the case of e-mails, access to an employee’s business-

related mail traffic might be essential for taking over or continuing his tasks during ill-

nesses or other absences. The solution suggested by the trade union for granting ac-

cess to business mails but not to private ones will be reviewed below.

Another argument for Electronic Performance Monitoring could be that computers ex-

ceed human supervisors in fairness, as they record employee achievement with unri-

valed objectivity, thus enabling fair personnel evaluation and performance appraisal.

Effects of Electronic Monitoring

Since the late eighties, several studies have been trying to assess the effects of elec-

tronic performance monitoring on employees work performance, work satisfaction and

health condition. Most of them were conducted in the United States. Still, the amount of

research does not correspond to the amount of electronic monitoring usage, or, as

Mihaela Vorvoreanu and Carl Botan have put it, “the paradox of electronic surveillance

is that it is much used and little understood” (Vorvoreanu/Botan 2000, 3). The evidence

yielded so far hardly allows simple overall conclusions, but is rather mixed, as we will

now shortly illustrate.

The most unequivocal picture can be reported regarding the relation of electronic

monitoring and stress: Several sources indicate that electronic monitoring increases

stress at work and thus diminishes employee satisfaction. For example, Aiello and Kolb

1995 conducted an experiment consisting of two groups that had to perform data entry

tasks with one group being monitored and the other not. Afterwards, both groups re-

ported their perceived stress. The members of the non-monitored group had been sig-

nificantly less stressed than those of the monitored group. Accordingly, Botan 1996,

Brown 1996, Kidwell and Bennet 1994, Mishra and Crampton, and Chalykoff and Ko-

chan 1989 have found a negative impact of electronic monitoring on employees’ job

satisfaction, which even resulted in increased absenteeism and job turnover, and “psy-

68

chological illnesses such as anxiety, depression and nervous breakdown” (Brown

1996, 1242). Chalykoff and Kochan as well as Kidwell and Bennett mark however that

the effect’s size largely depends on the social circumstances under which monitoring

procedures are introduced, resulting in differing employee perceptions of “procedural

fairness” (Kidwell/Bennett 1994, 207).

Regarding effect differences between the monitoring categories we introduced above

in connection with employee satisfaction, Stanton and Julian 2002 report interesting

evidence from an experiment on clerical task performance conducted with psychology

students: the group that was told to be monitored primarily on quantitative terms

(equivalent to our “quantity” and “traffic data” categories) expressed significantly less

work-related satisfaction than the group told to be monitored in a qualitative way

(equivalent to our “content monitoring” category).

Case Study: Phone-call monitoring at a travel agency

A monitoring system was installed that recorded whether employees’ phone calls with

customers lasted beyond the standard length defined by management in order to re-

duce overall calling costs. The system included potential listening-in on calls, and also

recorded employees’ absences from their workplace. Employees’ reaction to the sys-

tem was very negative, and 75 percent signed a petition against it. The company re-

acted with stressing the system’s significance for rising productivity and the employees’

obligation to adapt to it.Source: Spinello 1997

It is of course of particular interest how electronic monitoring and work surveillance

affects work performance. In this regard, the studies conducted up to now display a

particularly inconsistent picture: Evidence suggesting a negative impact of electronic

monitoring on job performance (Ottensmeyer and Heroux 1991) faces evidence sug-

gesting a positive one (Aiello/Kolb 1995) as well as evidence revealing no significant

effect of monitoring at all (Griffith 1993). Of particular interest are the studies of Aiello

and Kolb 1995 and Aiello and Svec 1993, as both are characterised by mixed out-

comes in themselves: The already mentioned 1995 study based on the data entry ex-

periment shows a positive effect of monitoring on subjects judged to have high keying

skills, while subjects with low keying skills that were monitored performed less well

than those that were not. The 1993 study shows an equivalent difference between

simple and difficult tasks: While electronic monitoring had a positive impact on the

performance of the simple tasks, its impact on the difficult ones was negative.

Concerning the comparison between different monitoring categories provided by

Stanton and Julian 2002, participants tended to emphasise the aspect of their work

that they were told was monitored: Those that were told to be quantitatively monitored

69

performed better on quantitative terms, while those qualitatively concentrated more on

quality. If they were not told what aspect of monitoring was more important, they also

tended to focus on the quantitative aspect.

Apart from these findings, it can of course also be assumed that stress, impaired

health, and reduced work satisfaction that were above identified as being reinforced

through electronic monitoring, also play a role in diminishing individual productivity.

B.3.5 Ethical discussion

The topic of electronic performance monitoring and work surveillance has not only

been empirically explored, but also and quite frequently been discussed from an ethical

perspective. The discussion of electronic monitoring possibilities has thus often been

linked to the concept of an individual right to privacy, as stated in Article 12 of the Uni-

versal Declaration of Human Rights, saying that “no one shall be subjected to arbitrary

interference with his privacy [...]” (United Nations 1948; Rotenberg 2000). This leads to

the conclusion that employers’ interests must be “properly balanced” with employees’

civil liberties, principles of data protection, and fundamental rights.

What such a proper balance should look like has been sketched in slightly differing

ways in different legal contexts: In the United States, the main intention of employee

rights’ advocates and pressure groups like the American Civil Liberties Union

(www.aclu.org) seems to be to establish an employee’s right on being notified about

how and when he is being monitored and on being allowed to access the data col-

lected about him. In the European Union countries, where this is already part of the

legislation in force, social actors like pressure groups or trade unions tend to demand a

restriction of electronic monitoring to the collection of quantity-related and traffic data,

excluding content evaluation except in special cases.

For telephone conversation, this is already part of some national legislations, e.g. the

Austian and German one. Accordingly, the Austrian Union of Salaried Employees

(GPA) suggests for the case of e-mails to allow every employee a reasonable amount

of private e-mail traffic from his company account and to establish different mail-folders

in the employee’s e-mail account for job-related and private mails. This allows col-

leagues and supervisors to access job-related mails if necessary for reasons of em-

ployee absence or supervision, while securing the privacy of his private mails.

Case Study: Performance monitoring at a UK financial services company

The company department responsible for collecting arrears pertaining to customer’s

personal loans was monitored according to quantities including the number of accounts

70

worked on by an employee, the amount of money promised to be collected and actu-

ally collected, the number of broken payment promises, and the amount of talking and

typing time per case. The electronic monitoring results were used at the quarterly per-

formance appraisals, however not as the primary base of judgement, but embedded

into a broader competency-based perspective. The employees reported the possibility

to question any statistic collected about them if they felt inclined to do so. The moni-

toring was strictly outcome-oriented, which was positively valued by the employees. All

employees were informed about what kinds of monitoring took place, but not all were

aware that the data collected about their performance were accessible for them. Ac-

companying research found that despite the transparent and non-overemphasizing

way of handling electronic monitoring, its impact on individual employee evaluation

was substantially influenced by an employee’s social position in the team.Source: Ball 2001

Another demand, included for example in a code of practice on online rights recently

launched by the Union Network International (UNI), consists in the involvement of a

trade union or labour council representative or another employee-selected representa-

tive in the act of accessing monitoring or surveillance records.

An important empirical aspect of e-work- and e-collaboration that is also relevant for

ethical considerations is that remote co-workers are to a much higher degree restricted

to e-mail and online groupware in their communication, which makes them much more

susceptible to electronic monitoring than other employees. This was also stressed by a

Siemens labour council member we interviewed who co-operates with Indian software

developers.


We cite excerpts of two anonymised internal agreements of Austrian companies re-

lated to Electronic Monitoring, and the already mentioned code on employee online

rights launched by the Union Network International (UNI):

UNI-Code

• Employees are permitted to use enterprise electronic facilities for non-business

purposes, both internally and externally, provided that this is not detrimental to their

job responsibilities.

• Communication will be subject to surveillance and monitoring only if this is permit-

ted by collective agreement, if the employer is legally obliged to do so, or if the em-

ployer has reasonable reason to believe that an employee has committed a crimi-

nal offence or serious disciplinary offence.

71

Internal Agreement 1

• The proxyserver only documents refused connections. No protocols are made con-

cerning company-intern communication and external internet traffic that is not indi-

cated by the virus protection software.

• Internet records are deleted after three months. The receiver of a recorded e-mail

has to be informed.

• Employees are trained in the secure and economic handling of e-mails and the

intranet.

• The labour council is entitled to check the compliance with the Internal Agreement

at any time and without concrete complaints.

Internal Agreement 2

• Internet records consist of user, adress, time. The content of messages is not

documented. The records are only made for technical reasons, to analyse and cor-

rect mistakes and to combat threats to security. The records are only accessible for

the technical personnel. They are deleted after one month and never printed out.

72

B.4 Protection of Intellectual Property Rights in an age of computers

Computer technology enables the development of many new software-based products

that have by now gained importance in almost every branch of business. It furthermore

allows the conversion of long-established kinds of media like texts, pictures, and films

into software files. An important aspect of this development is that software files of all

kinds can be copied easily and without any loss of product quality (Samuelson/Davis

2000). Moreover, the World Wide Web provides easy ways of exchanging files and

communicating about them, whether in the context of the new forms of employment we

are adressing here, or for marketing purposes.

These conditions imply a challenge to the claiming of Intellectual Property Rights

(IPRs) on work outcomes in two ways: First, it becomes an important task for compa-

nies to prevent hackers from software piracy and online industrial espionage whenever

any work outcomes are exchanged online in the form of software files. And secondly, it

has in many countries not yet been unequivocally decided how computer-implemented

inventions should be classified in relation to IPR: conflicting standpoints range from the

claim that software should be generally patentable to the opinion that it should be

completely free. The legal classification of computer-implemented inventions is conse-

quential for the extent to which IPR may be claimed on them and their sharing between

developers and their companies.

Since exchanging files online can be conceived as an essential characteristic – or even

a necessary pre-condition – of e-work and e-collaboration, and since a substantial

amount of e-workers is involved in the development of computer-implemented inven-

tions, we will now briefly line out possibilities of dealing with both IPR-related chal-

lenges in the context of e-work and e-collaboration, including a review of relevant leg-

islation.

B.4.1 Data security and IPR sharing in the context of e-work

For the context of e-work and e-collaboration, the two IPR-related challenges de-

scribed in the introduction can be re-formulated in the following way: (1) How can In-

tellectual Property Rights on company assets be adequately secured in the context of

electronic data transmission while safeguarding their right to access relevant company

information? And (2): How can the Intellectual Property Rights on computer-

implemented inventions be properly shared between developers and the companies

they work for?

73

Data encryption

The Word Wide Web unfortunately not only offers new ways of easy data exchange –

through mail attachments, newsgroups and other groupware, – enabling new ways of

remote co-operation. These very possibilities have also turned out to bear considerable

risk of information on work-outcomes – or even the outcomes themselves – getting in

the wrong hands through hacking and related practices labeled as cybercrime. A new

dimension has thus been added to industrial espionage. What can be done to avoid or

tackle this risk?

An obvious option of risk-avoidance consists in simply not sending files of any impor-

tance through virtual channels. While offering the relatively highest degree of security,

this option can hardly be considered feasible for e-work and e-collaboration which both

have to rely on a certain amount of data exchange through information technology due

to spatial remoteness. Of course, the amount of data virtually shared and exchanged

can really be reduced to an absolute minimum, implying that what is not absolutely

necessary – including all company information not strictly project- or department-

related – is being kept from circulation through the World Wide Web. Although there is

no data available on the diffusion of this kind of policy, there is evidence from expert

and employee interviews suggesting that it does take place.

It is however likely to present a way of discriminating against e-workers and e-

collaborators, as they are thus being excluded from information that employees work-

ing centrally can easily access through the company intranet or non-digital storage

devices. To ensure that e-workers can equally participate in the company and its op-

erations, it appears therefore desirable to allow for sufficient information sharing

through securing the transmission channels as far as possible. This can be done in

three technically different ways.

First, data packages sent per e-mail can be encrypted. This is enabled by several

software packages employing differing encryption algorithms. There are two major

types of encryption: Symmetric key cryptography uses the same key for encrypting and

decrypting a message. Here the sender and the receiver agree on a key before they

start secure communication. Asymmetric key cryptography (also called public key

cryptography) is designed so that the key used for encryption is different from key used

for decryption and the decryption key cannot be calculated from the encryption key.

The encryption key is made public (public key) so that anyone on the network can en-

crypt the message but only a specific person with corresponding decryption key (pri-

vate key) can decrypt the message.

Symmetric keys are used for encrypting large amounts of data as they work faster and

are not susceptible to known cipher text attack. Asymmetric keys are used for key dis-

74

tribution, digital signature and message authentication. Typically, symmetric keys are

shorter in size than asymmetric keys and easier to manage. They however require high

levels of secrecy and are susceptible to leaks if many users share the same symmetric

key. Therefore, for long messages among small number of users, symmetric key

cryptography and for short messages among large number of users, asymmetric key

c r y p t o g r a p h y s e e m s t h e p r o p e r c h o i c e ( s e e e . g .

http://developer.iplanet.com/docs/manuals/security/pkin 29-04-2002)

Besides encrypting data, there are also two options of making the connection used for

data transmission more secure. The cheaper and more common one is provided by so-

called Virtual Private Networks (VPNs). These provide a private channel through public

networks by assigning private ID numbers to the computers involved in sending and

receiving, making it impossible to track down a data package’s sender, receiver and

content, except for the receiving computer. A VPN thus runs over the public infra-

structure of the net, but uses an encrypted tunnel to keep the information away from

potential hackers. VPNs are thus well suited to connect remote entities of organisa-

tions or e-collaborators (see e.g. www.intranetjournal.com/foundation/vpn-1.shtml 11-

06-2002).

An even more secure, but also more expensive solution consists in dedicated WAN

lines, also called Dedicated Secure Networks (DSNs), which consist of exclusive lines

between sender and receiver that a company leases. This results in a kind of extended

company intranet. As they are rather expensive, such connections are standard only

for banks and military operations, although also a few other companies have imple-

m e n t e d D S N s f o r t h e i r i n t e r n a t i o n a l l i n k s ( s e e e . g .

www.networkcomputing.com/905/905colmoskowitz.html 12-06.2002).

Sharing of IPRs and restraint-of-trade agreements

Many jobs in e-work- and e-collaboration relations consist of developing computer-

implemented inventions. This raises two questions in relation to IPR: First, to what ex-

tent do they have a share in the returns their inventions yield? And secondly, in how far

are they allowed to use the knowledge pertaining to their developments for other em-

ployers?

The most employer-oriented answer to these questions would look as follows: The

right to exploitation of computer-implemented inventions is completely left to the com-

pany. Work-related knowhow and knowledge is kept from being used for other compa-

nies after the end of an employment relationship by means of a “restraint-of-trade”

paragraph in the employment contract which precludes the employee from taking up

employment in the same branch for a certain amount of time. On the other hand, a

strictly employee-oriented standpoint would imply that employees are free to use not

75

only their work-related knowledge and knowhow for other employers, but even to ex-

ploit their work’s outcomes, which possibly includes the copying of inventions for a

former employer’s competitor.

Case Study: An employee between two software development firms

A female employee developed an online paying devise called U-PAY, which took about

two years. She did not get adequate recognition, her boss took most of the credit him-

self. She therefore started looking for a new job and signed up with the major com-

petitor of her employer, where she was provided with the task to develop a paying

system similar to U-PAY, but in a much shorter time. To achieve this, Ellen had to copy

the „U-PAY design specs and the PL/1 source code“ and take it to her new employer.

„Occasionally, she felt some guilt over this decision, but her guilt was assuaged by her

firm conviction that this was her work and that she had as much right to it as Apollo.“Source: Spinello 1997

How the two questions are answered empirically in different national contexts depends,

together with business traditions, to a substantial degree on the relevant legislation and

jurisdiction, in the case of exploitation rights also on the classification of computer-

implemented inventions as patentable or not, as already mentioned in the introduction.

Examples for such legislation will be presented in the next section.


Three legislation topics appear relevant in the context of virtual IPR protection: Encryp-

tion-related regulations, regulations regarding international data transfer and legislation

relevant for the sharing of IPRs in the context of employment.

Encryption

Most countries – including most Non-Western ones – have no legal controls on the use

of cryptography and related means of data security like Virtual Private Networks. In the

vast majority of countries, cryptography may be freely used, manufactured, and sold

without restriction. There is a tendency towards international relaxation of regulations

relating to encryption products. Only in a small number of countries, strong domestic

controls on the use of cryptography exist. These are mostly countries where human

rights command little respect.

The United States play an important role in advocating the introduction of encryption

controls around the world. This may be partly explained by the dominant role that na-

tional intelligence and federal law enforcement agencies hold in the development of

encryption policy. There are however yet no domestic use or import controls on cryp-

tography in the United States. The Federal Bureau of Investigation has several times

76

proposed legislation that would require all manufacturers of encryption products and

network services to include key recovery or escrow mechanisms to enable immediate

decryption of communication or information encrypted by such products or services on

the public network. No new technology with encryption mechanisms would thus be

able to be developed or sold without the prior approval of the related chief law en-

forcement official. The FBI, assisted by the NSA, Justice Department and Defense

Department, has actively lobbied domestic and international organisations for encryp-

tion access programs (see Electronic Privacy Information Center Washington DC

1999).

The European Union has so far rejected to impose restrictions on encryption. The

European Commission also seeks to reduce intra-Union controls on encryption prod-

ucts. In October 1997, the European Commission’s Directorate-General XIII, which is

responsible for Telecommunications, Information Market and Exploitation of Research,

issued a report that adressed the United States’ policy of encouraging key escrow and

recovery schemes. It stated that restricting the use of encryption could possibly prevent

law-abiding companies and citizens from protecting themselves against criminal at-

tacks, and that no key escrow system could totally prevent criminals from using these

technologies.

International Data Transfer

The EU Data Protection Directive already reviewed in chapter B.3 includes the princi-

ple that personal data may only be transferred to countries outside the EU that guar-

antee an “adequate” level of protection. Analyses of data protection laws and dialogues

with the EU’s more important trading partners have been performed to decide which

countries can be regarded as offering this adequate protection. With the United States,

a negotiation process has been initiated. Consequently, on 4th November 1998, the

U.S. Department of Commerce issued a set of privacy principles in order to establish a

permanent framework for the transfer of personal data between the US and the EU.

Following that initiative, the year 1999 was dedicated to a series of extensive discus-

sions on a bilateral basis between the American government and the European Com-

mission. Recent legislation concerning privacy and data protection in developing coun-

tries that could be due to the EU’s data protection directive were already reviewed in

Chapter B.3. The United States themselves do not have a comparable regulation con-

cerning the transfer of data from the U.S. into other countries (see for instance

http://europa.eu.int/comm/internal_market/en/dataprot/news/harbor2.htm 30-04-2002).

IPR sharing and patent legislation

Two legal questions appear relevant in the context of Intellectual Property rights on

computer-implemented inventions: First, whether computer-implemented inventions

are classified as patentable, and secondly, what follows from patent legislation or other

77

relevant regulations for the rights on computer-implemented inventions in the context

of employment relationships.

On the global scale, there is now a trend in favor of adopting patent protection for

computer-implemented inventions. This trend has accelerated following the adoption of

the TRIPs („Trade-Related Aspects of Intellectual Property“) portion of the GATT,

which mandates member countries to provide patent protection for inventions in all

fields of technology. The consequences of varying patent-related classifications that

preceded this development can be illustrated by the example of the German jurisdic-

tion regarding computer software (see Däubler 2001): In 1978, a High Court decision

declared software as non-patentable, but to fall instead under the German Copyright.

This implied a relatively weak protection compared to patented products, as the Copy-

right – mainly directed towards works of art – only grants protection to a thought’s rep-

resentation, not the thought itself. Moreover, it can only be granted to a person, not to

an organisation. Even the Copyright was applied quite restrictively to computer-

implemented inventions, until the EU’s Directive on the protection of computer pro-

grams was issued in 1991. Its implementation led to a less restrictive application of the

Copyright to software.

In the European Union, the current legal situation regarding patent protection of com-

puter-implemented inventions is ambiguous. Although the statutory provisions setting

out the conditions for granting such patents are similar, their application in the case law

and the administrative practices of Member States is divergent. Thus, a computer im-

plemented invention may be protected in one Member State but not in another one,

which has direct and negative effects on the proper functioning of the internal market.

Meanwhile, the EU Commission has proposed a Directive on the Patentability of com-

puter-implemented inventions in February 2002 (see European commission 2002b).

The reasoning behind this iniative is that while computer programs „as such“ are ex-

cluded from patentability by Member States’ patent laws and the European Patent

Convention (EPC), in fact many patents for computer-implemented inventions have

been granted by the European Patent Office (EPO) and by national patent offices. The

main conditions the proposals states for a computer-implemented invention to become

patentable are that it belongs to a “field of technology”, is „susceptible of industrial ap-

plication, is new, and involves an inventive step.“ The proposed Directive does not pre-

scribe how patented computer-implemented inventions are to be handled in the context

of employment. This will therefore remain in the compentency of the national legisla-

tions, implying differences and national specialities that cannot be extensively reviewed

in this overview. We only return briefly to the example of Germany: Inventions that are

subject to the Patent Law have to be reported by the employee. The employer can

then make a claim on it for four months afterwards. If he does make it, he is obliged to

78

pay a compensation to the inventor which is reported to be „not spectacularly high“

(see Däubler 2001).

In the United States, a computer-implemented invention does not have to include a

technological contribution. The mere fact that the invention uses a computer or soft-

ware makes it a part of the technological arts if it also provides a "useful, concrete and

tangible result". That the U.S. does not require the invention to provide a technical

contribution means that the restrictions on patenting of business methods (apart from

the requirements of novelty and inventive step) are negligible. Recent U.S. jurisdiction

has shown a tendency to interpret intellectual assets necessary for software develop-

ment – e.g., mathematical formulas – which were claimed to be corporate trade secrets

as public knowlegde. A prominent example is the case Northwest v. American Airlines,

in which American claimed that secret information on its pricing and yield management

tools were illegally used by former American software developers for Northwest, a

claim that was turned down making use of the public-knowledge-argument.

The situation in Japan is comparable to the European one: a computer program that

simply performs a mathematical calculation is not patentable. However, if the software

is used as a means for materialising a law of nature and is linked to appropriate hard-

ware elements, it may be patentable. E.g., software claimed as part of a microcom-

puter embedded in a fishing rod to control the operation of the reel can be patented.

In Non-Western countries, the TRIPS agreement is expected to have also an impact

on the protection of computer-implemented inventions. In 1999 however, software pi-

racy rates in many developing countries and transition economies in Eastern Europe

still ranged from 72-98% of the total software market. Combating piracy therefore calls

for strong protection based on the TRIPS agreement’s articles 41 – 61 (see

http://iprcommission.com/textonly/maymeet4.html – 20-05-2002). Since developing

countries have been given up to 11 years to amend their laws, if necessary, to meet

the TRIPS requirements, this desirable development might however still take some

time (see http://www.softwareprotection.com/patent.html).

Restraint-of-trade agreements

Restraint-of-trade agreements within employment contracts are principally possible in

all EU countries. There are differences regarding the maximum amount of time for

which a restraint may be agreed, ranging from six months (Belgium) to two years

(Germany – see www.salesprofi.de/bp/vertrieb-verkauf/daten/recht0501.htm 18-05-

2002). Besides, some countries grant employees – at least in some professions – the

right to receive a compensatory payment during the restraint period. If a restraint-of-

79

trade agreement is legally valid depends for the single case largely on the national

jurisdiction (see the case study below).

Case Study: Restraint-of-trade agreements at a German software company

The German company U has established itself on the software development market.

The main company activities are carried out by a small group of employees. These

employees know all company secrets, they are familiar with the customer relationships,

the calculation of prices and U’s plans for future products. To avoid that this knowledge

gets into the hands of U’s competitors, the company’s employment contracts contains

a restraint-of-trade regulation implying that the employees are not allowed to take up

work for one of U’s competitors and/or establish business contracts to one of U’s cus-

tomers for three years after the end of employment for U. When the employee M

leaves the company and starts working for U’s competitor, he obviously makes use of

his U-related knowledge. U claims he is not allowed to due to the restraint-of-trade

regulation, to which however K affirms not to be bound, as it was not legally valid.Source: www.shahnam.de/tipps/konkurrenz.html

In the United States, courts have generally upheld two-year time limits for restraints of

trade – there also called restrictive covenant – because this gives the employer suffi-

cient time to replace a departing employee and protect the company from unfair com-

petition during that time. The courts will also consider whether the geographic scope of

a restrictive covenant is reasonable. In certain instances, a court will look to the public

interest to decide whether to enforce a restrictive covenant (see e.g.

www.aafp.org/fpm/20001100/52eval.html 05-05-2002).


Novartis Code of Conduct

Contracts relating to the use of intellectual property rights (patents, plant-variety rights,

trademarks, designs, copyright, know-how and trade secrets) are often subject to spe-

cial rules and may therefore be critical in terms of antitrust. They need particular atten-

tion by legal counsel.

Alcatel statement on Business Practices

Alcatel recognizes Intellectual Property Rights as a central shareholder value in any

high technology company. Alcatel takes every appropriate action to preserve and en-

hance its Intellectual Property and respects the Intellectual Property rights of others.

80

B.5 Health implications of Display Screen Equipment

By definition, both e-work and e-collaboration consist to a differing degree, but always

to a substantial amount, of computer-based work: Both the communication with co-

workers and supervisors and the sharing of work-relevant information necessarily rely

on computer-based technologies and tools in these new work arrangements. Moreo-

ver, many e-workers also deal with computers in the subject-related parts of their work,

whether they develop software or use computers as a medium of generating texts,

processing data or communicating with customers in call centers. This implies a sub-

stantial amount of daily exposure to display screens, making them particularly suscep-

tible to related health risks and resulting productivity declines.

Research responding to this has been trying to more precisely assess the kinds of risk,

their amount and the factors influencing them. As a result, programmes and guidelines

for proper display screen equipment, its use and workplace environments have been

developed. On the following pages, we review these materials and sketch possible

implications for the feasible organisation of e-work and e-collaboration.

An important aspect of work with display screen equipment of potential relevance for

health and well-being consists in the quality of the software used: How suitable is it for

the tasks to be performed? Can it be adjusted to a user’s needs and preferences, or

does it prescribe how things are to get done? Questions like these are dealt with by a

relatively new branch of human science labeled “Usability research”. Corresponding

results will also be discussed below.

B.5.1 Health problems connected to work with DSE by kind and fr equency

Several studies from different countries have produced evidence for the occurence of

health-related problems in connection with display-screen-based work. But what kinds

of problems occur most frequently? Table B.5.1 (next page) shows the results of a

German survey consisting of 208 respondents working at display screen terminals

(Ertel et al. 1997, Blaha/Ambros 2001).

The results suggest that the three most important problem groups consist of:

• problems related to the movement apparatus – prominently including Repetitive

Strain Injuries (RCIs) such as capal tunnel syndrome, tendinitis, buritis, myofascial

pain syndrome etc., and Cumulative Traume Disease (CDT),

• eyesight-related problems – for them, the label “Computer Vision Syndrom” (CVS),

has been introduced, and

81

• symptoms related to mental stress which affect individual well-being like headache,

irritability and fatigue.

The relevance of these three categories is confirmed by other studies, e.g. a survey by

the German Federal Office for work protection and work medicine, in which 49,2 per-

cent of the respondents reported pain in the neck/shoulder area, 35,4 percent stress-

related symptoms, and 29,8 percent eyesight-related problems. According to an OSHA

study for the whole European Union, an average of 30 %, meaning 44 million workers,

suffer from backache, and 17% of the workers suffer from muscular pains in arms or

legs (see http://europe.osha.eu.int). A study by the University of Carolina reports that

over 70 percent of U.S. computer users suffer from Computer Vision Syndrome (see

www.healthnet-services.de), while a study conducted by American National Institute of

Occupational Safety and Health indicates that this number might even be as high as 88

percent (see ILO 2001,162).

Table B.5.1. Health i mpairments i n percent of respondents (n = 208)

Pain in shoulders/neck 62,7 %

Lower back problems 53,0 %

Headache 45,3 %

Eyesight-related problems 43,9 %

Tiredness, fatigue, weariness 35,6 %

Exhaustion 34,5 %

Reduction of visual acuity 33,6 %

Reduction of concentration 30,8 %

Agitation, strain 26,8 %

Lack of impetus 26,8 %

Trouble related to hands, arms, legs 24,2 %

Sleeplessness 22,5 %

Irritability 21,9 %

Stomache-ache 16,2 %

Dejection 13,7 %

Sensitivity to noise 12,5 %

Pounding heart 11,4 %

Redness of skin 11,4 %

Feeling of dizziness 9,7 %

Difficulty in breathing 8,5 %

Lack of appetite 7,7 %

Pain in the chest 6.0 %

Trembling of hands 2,6 %

Source: Blaha/Ambros 2001

82

Less well-established connections with work at display screen equipment have been

affirmed for skin complaints (rosacea, acne, dermatitis, pustolosis, urticaria, ostitis

etc.), and reproductive hazards (miscarriages, congenital deformities and fertility prob-

lems) – both were attributed to the electromagnetic radiation of display screens, but

without yielding convincing empirical evidence (see e.g. WHO 1998).

Besides presenting descriptive evidence concerning the frequency of certain kinds of

health impairment, ergonomic and usability-related studies sought to explore the link

between kinds of impairment and sources of strain related to work with display screen

equipment more closely (see e.g. Blaha/Ambros 2001, Ankrum 1997,

Aaras/Fosterwold et al. 1997, Jaschinski/Heuer/Kylian 1998, Vink/Kompier 1997, Mon-

Williams et al. 1998).

Thus, movement apparatus problems have been causally attributed to

• sitting position,

• desk height, keyboard and display screen position,

• repetitive movements enforced by software.

Eyesight-related problems were found to be connected with

• the amount of continuous exposure to display screens,

• the quality of the display screen in terms of size, resolution and reflection,

• environmental factors like lighting and viewpoints around the workplace.

Stress symptoms were attributed to

• the amount and speed of information procession enabled through computers and

internet,

• task organisation and constraints set by software packages concerning the individ-

ual way of performing tasks,

• the amount of continuous exposure to display screens.

B.5.2 Ergonomic and usability-related principles and recommandations

The causal factors just mentioned already provide hints to what ergonomic and usabil-

ity-related principles have been derived from the evidence just reviewed. Such princi-

ples can be found in numerous studies, guidelines, checklists, and recommendations

and are even the subject of an ISO-standard, ISO 9241 “Ergonomic requirements for

office work with visual display terminals (VDTs)”. While it is beyond the scope of this

short overview to extensively review and discuss this material, the following table lists

its most common contents and indicates the relevance of the listed measures for the

three health problem categories we identified above:

83

Table B.5.2 Rel evance of variables for problem categories indicated by Xs

Ergonomically relevant variables Movement

Apparatus

Problems

Eyesight

Problems

Stress Symp-

toms

Lighting of the workplace XXX

Reflection/glare of display screen and other

material at the workplace

XXX

Requirements of ergonomic working position –

positioning of display screen and keyboard;

adjustability of chair and table; wrist rests etc.

XXX

Quality parameters of the display screen - size,

resolution, contrast, reflection

XXX XX

Organisation of work at display screens – possi-

bility of sufficient breaks, activity changes, etc.

XX XX XXX

Performance of exercises XXX XXX XXX

Adjustability of software to users XX XXX

Sources: Blaha/Ambros 2001, Ankrum 1997, www.ergoweb.com,

www.fulwood.com/fulwood/downloads/monitorsmatter2000.pdf, www.office-ergo.com,

www.ergoonline.de, www.flinders.edu.au/ohsw/Ergobook/EB-Office_layout.htmlb,

www.ergoport.com.au, www.afscme1185.org/ergonomics-24.html, etc.

In general, the proposed principles can be divided into behaviour-related ones that aim

at the individual employee and the way he organises his work (e.g., exercises and rest

breaks) on the one hand, and equipment-oriented ones aimed at the technical shaping

of the workplace on the other hand.

Case Study: User-centered computer-human interface technology at Deep Space

Network (DSN)

The company’s old software system to monitor network performance and identify net-

work problems was failing to meet the users’ needs, required modernisation and

needed redesign to allow for growth. To meet these requirements, a user-centered

approach was employed. At the beginning, usability criteria were formulated by the

development team; the users, sceptical at the beginning, had the opportunity to test

and comment on prototypes of the new software, which in turn were modified. This

user-centered approach not only led to a superior system, but also provided a high

level of user satisfaction and thus has become a model for other development efforts.Source: Ellman/Carlton 1993

Software Tools

Several attempts have been made to convert ergonomic principles into software tools

that faciliate their practical implementation into individual working routines. Most com-

84

mon are ergonomic self-assessment tools, which mostly consist of information sam-

ples, questionnaires and checklists including the bullet points listed above. They also

contain advise on how to change or counteract behaviour or settings that were as-

sessed as risky. Work pacing software coaches users into more healthful work patterns

by providing a sequence of alerts indicating the need for a microbreak based upon the

intensity and duration of keyboard and mouse activity. In addition, the software pro-

vides periodic ‘stretch-break’ alerts based on overall computer usage patterns. Fur-

thermore, it has been recently explored what possibilities regular e-mail programs offer

to reduce the risk of information-related stress due to an overflowing mailbox

(www.baua.de/news/pm38_02.html).


To what extent have ergonomic and usability-related principles been yet included in

national and transnational legislation?

EU

The European Union’s Council has issued a directive regarding workplaces with dis-

play screen equipment in 1990 (European Commission 1990). The directive, without

going into ergonomic or usability-related details, prescribes minimum requirements

regarding safety and health conditions at work places with display screen equipment

and formulates procedures to guarantee that violations of these requirements are pre-

vented, or systematically detected and removed (Rauterberg 1996). If an employee

“habitually uses display screen equipment as a significant part of his normal work” (Ar-

ticle 2, c), the employer is obliged to perform an analysis of the workplace, particularly

regarding the impairment categories we definded above, namely “possible risks to

eyesight, physical problems and problems of mental stress” (Article 3, 1). Any risks

found are to be remedied by “appropriate measures” (Article 3, 1). Furthermore, em-

ployees working with Display Screen Equipment have to be provided with appropriate

information, instruction and training in order to enable them to adjust their own behav-

iour to the minimum requirements on safety and health conditions (Article 6). Employ-

ees should also be involved in the design or redesign of display screen equipment

workplaces in accordance with the requirements of the directive (Article 3). Concerning

the usability of software, the directive states that software must be “suitable for the

task”, “easy to use and, where appropriate, adaptable to the operator’s level of knowl-

edge or experience” (Annex, 3 (a) to (b)).

The ways in which this directive has been implemented within the EU countries will be

shortly reviewed below for three selected EU members.

85

USA

In the United States, there are no federal regulations or guidelines which govern the

use of display screen equipment in the private sector. To assess the potential effects of

eletromagnetic fields, a federal research program was intiated in 1992.

On the state and local level approximately 50 bills were introduced in 33 states to

regulate display screen usage relating to private industry. Five states have passed

legislation either to establish committees to study display screen related issues, or to

advise employers to provide training when installing display screen equipment. Colum-

bia and New Mexico have issued executive orders which establish ergonomic stan-

dards on display screens used by public employees. At least six states have issued

ergonomic-related guidelines for state procurement of display screen equipment and

computer workstations.10

To date the only locally successful legislation in the U.S. has been the Suffolk County,

New York law of 1988 which regulates the use of display screen equipment in the

workplace. It applies to companies with more than 20 display screens, and requires a

15 minute break every three hours for employees who use the terminals more than 26

hours per week. In addition, employers must pay 80% of the cost of annual eye exams

and the cost of eyeglasses. Since 1990, adjustable desks, five-legged chairs, and non-

glare screens are compulsory for all new equipment.

The American National Standards Institute (ANSI) has issued a standard (ANSI/HFS

100-1988) with ergonomic guidelines which include design requirements for visual dis-

plays, keyboards, work-stations, and techniques for measuring compliance with the

specifications (see www.ansi.org).

Non-Western World

Concerning developing countries, there is no evidence on legislation regarding work

with display screen equipment. In general, the process of raising ergonomic awareness

seems to have only recently begun in the Non-Western world (see e.g.

http://www.iea.cc/events/develop.cfm – 30-04-2002).

10 See www.psac.com/H&S&E/Health_and_Safety/H&S_Bill_C-12-PSAC_Submission-e.html; www.opc.on.ca/beststart/work-place/wkplcea.html – 19-05-2002;

86

B.5.4 Diffusion and effect of ergonomic and usability-related standards regard-

ing DSE

Given the potential health impairments brought about through working at display

screen equipment and the attempts to counteract them, both legally and through rec-

ommendations, checklists, and standards: what evidence is available concerning (1)

the extent to which display screen equipments are shaped and evaluated according to

principles of ergonomics and usability, and (2), what impact this shaping has where it

does take place?

Diffusion of ergonomic principles

To shed light on the diffusion of ergonomic and usability-related principles across the

European Union, we will shortly review the situation regarding display screen equip-

ments in three selected EU countries several years after the corresponding EU Direc-

tive.

In Germany, even in 2001 every third workplace with display screen equipment was

reported to have not yet been evaluated according to the EU directive. Of those that

were, only 15 percent were found to meet the minimum requirements in force. 29 per-

cent of the complaints were due to suboptimal monitor placement, 27 percent to uner-

gonomic furniture, and 20 percent to work environment factors like climate, acoustics

and lighting. All in all, the ratio of unergonomic workplaces with display screen equip-

ment is reported to even have increased during the recent years

(www.heise.de/ct/01/23/052 – 04-05-2002).

In France, improvements regarding workplaces with display screen equipment follow-

ing the EU Directive are reported to have been “slow in coming” (Rauterberg 1996).

Only a “small number” of companies has taken steps to obtain compliance with the EU

Directive and its French implementation, the Decree n° 91-451. Factors mentioned as

possibly responsible for this observation include the cost of installing new computers,

and the incompatibility between ergonomic principles and architectural restrictions.

Improvements are reported regarding the quality of display screens and software, but it

is unclear whether this is a direct result of the legislation or merely the advancement of

display screen and computer technology.

In the UK, the EU Directive has been described as having hardly had any significant

impact on the health risks associated with display screen equipment (Rauterberg

1996). There is also a political discussion going on regarding the necessity to imple-

ment the EU Directive and the validity of ergonomic principles in general.

87

For the United States, where the shaping of workplaces with display screen equipment

remains largely a matter of company-based self-regulation as was already stated in the

chapter on legal regulations, no nationwide evidence concerning the degree to which

ergonomic principles are applied is available. The same holds true for Non-Western

countries.

Effects of ergonomics

A positive effect of ergonomic and usability-related shaping of workplaces with display

screen equipment on employee well-being and productivity could be established by

several studies from different countries.

For example, in a British study from 1997, Henning et al. prompted computer operators

at two work sites to take three 30-seconds and one 3-minutes break from computer

work each hour in addition to conventional rest breaks. Some operators were asked to

perform stretching exercises during the short breaks. Mood state and musculoskeletal

discomfort were assessed at each work site over a 2- or 3-week baseline period and a

4- or 6- week treatment period, respectively. Operator productivity measures were ob-

tained from company records. No improvement in productivity or well-being was found

at the larger work site. At the smaller work site, productivity, eye, leg and foot comfort

all improved when the short breaks included stretching exercises.

Likewise, Hedge and Evans (2001) tested the effects of using ergonomic work pacing

software on typing and mousework. The performance of 56 U.S. computer software

programmers was passively monitored using the work pacing software for a baseline-

period of four weeks, then the whole personnel was monitored four another four

weeks. There was a statistically significant 59 percent improvement in work accuracy

following the implementation of the software. The total number of keystrokes and

mouse use was not affected.

Case Study: Computer Workstations at Petroleum Technology Center

Petroleum Technology Center (PTC) is Marathon Oil Company's technology and field-

operations support facility. Tasks performed by employees include usage of computer

workstations from half an hour to eight hours per day with an average of four hours per

day. The majority of tasks became computerized during the early part of 1993. As a

consequence, the workforce was down-sized, thus requiring more work to be accom-

plished by fewer workers. These two factors were thought to be contributing to an in-

creasing number of injuries related to CumulativeTraume Disease (CTD). From 1990

to 1993, the number of injuries increased from 1% to 3% of the total employees. By

1993, 77% of the injury claims and 83% of the total medical costs were CTD related.

Ergonomic risks found inlcuded awkward posture and repetitive movements required to

perform the computer tasks. Behaviour-related ergonomic intervention consisted of

88

lectures in ergonomics issues, training ten employees in order to provide in-house er-

gonomics advisors to coworkers, emphasizing exercise breaks every half-hour for five

minutes, and providing educational materials in pamphlets and wall posters. Equip-

ment-related measures included lowering work surfaces, adjusting chairs, purchasing

new adjustable chairs, adding/adjusting foot rests and wrist rests, changing the loca-

tion of computer terminals, purchasing and articulating keyboard trays, wrist rests,

mouse rests, foot rests, glare screens, document holders, task lights, and lumbar back

supports.

As a result, CTD claims decreased to zero. The feedback by employees was entirely

positive. The awareness of computer related ergonomics issues was increased. Cost

outcomes for the company were also positive: workers' compensation costs could be

reduced by 80 percent.Source: www.ergoweb.com; Cook/Pinelli 1995

Liaro and Drury (2000) investigated the impact three levels of keyboard heights had on

changing working posture (e.g. joint angles and postural shifts), and thus presumably

discomfort (e.g. rating of perceived discomfort and body part discomfort), and perform-

ance (e.g. typing speed, error rate and error correction rate). The hypothesized pos-

ture-comfort-performance interrelationships were partially supported. Keyboard height

had effects on working posture adopted. As in previous studies, the rate of postural

shift was a good indication of discomfort in a DSE task. Discomfort and postural shift

rate had adverse effects on performance (e.g. error rate). However, these effects on

error were judged by the authors as not too strong.

Dainoff and Dainoff (1986) compared a DSE workstation designed according to com-

monly accepted ergonomic guidelines was compared with one that deliberately broke

most of the rules. Subjects performed an experimental task involving data entry and

editing under realistic conditions. A composite performance measure was used which

took into account both speed and errors, and the subjects were paid by results. Per-

formance was 25% higher at the ergonomically designed workstation; and when differ-

ences in lighting were eliminated, there was still an 18% performance difference.

Ong (1984) studied data entry staff at a Singapore airline terminal before and after

ergonomic changes (including lighting, document holders, footrests, and more rest

pauses). Output (measured in keystrokes per hour worked) increased by 25%. The

error rate decreased from 1.5% to 0.1%. The output improvement occurred despite

spending less time at the terminal.

Case Study: Office Workstations at a U.S. company

Workers at the focal company had to perform regular office work using computers.

They reported high levels of physical discomfort associated with their workstations.

89

Ergonomic risks included awkward posture required to perform the tasks, and visual

discomfort involving glare. Regarding behaviour-oriented ergonomics, a pilot ergo-

nomics program was initiated, each new employee was given an ergonomic informa-

tion packet including different exercises to relieve stress and proper posture to perform

the tasks, and training programs were initiated. These measures were accompanied by

equipment-oriented interventions including the provision of new ergonomic chairs with

wrist rests, footrests, moving of workstations to minimize glare without shutting out

daylight, and the installment of blinds and window coatings to further reduce glare. As

a result, workers are more comfortable on their jobs and spend more time at their

workstations. High physical discomfort could be reduced by 60 percent. Overall com-

fort level could be raised from 18 percent before the program to 66 percent after im-

plementing the program. The amount of employees reporting high levels of fatigue

could be reduced by 50 percent.Source: www.ergoweb.com/CTD News, 1995, Consumers Power Intervenes before CTDs Hit,

Ergonomics that Work


University of Cambridge/Department of Physics:

• The screen should have well-defined characters of adequate size, a stable image

and easily adjustable brightness and contrast.

• The screen should be tilting and swivelling.

• Lighting should be satisfactory, with appropriate contrast between screen and

background.

• Heat and noise produced by the equipment should not be excessive so as to cause

discomfort or distraction.

• You should take breaks. It is recommended that short frequent breaks are taken,

rather than long infrequent breaks. 30 seconds every five minutes is better than a

long break each hour.

• When you do take a break, rest your eyes by looking at a distant object. Get up

and move your whole body, tense and relax the muscles of your shoulder, neck,

and hands.

University of Wales, Aberystwyth

The University shall ensure that all Users are provided with induction training in the use

of display screen equipment within the context of health and safety.

Users of display screen equipment who have not previously been trained in the use of

new or existing equipment or software, shall be given suitable training in order to carry

out their responsibilities. This training will be at the University's expense in each case.

Training in use of software approved by Information Services is provided at intervals

throughout the year.

90

B.6 Virtual collaboration and virtual teams

Internet technologies as distance-bridging facilitators are enabling the emergence of e-

collaboration, computer-supported co-operative work and virtual project teams. The

growth of organisational forms of virtual collaboration arises from the need to make

greater use of dispersed resources: as complexity increases, competitive pressures

intensify and product development times decrease. Features of ICT that reduce the

problem of geographical proximity become competitive necessities if they convey ad-

vantages superior to other forms of work and business organisation. Solely “virtual

organisations”, like, for example, a consulting firm established by a group of partners

without a central office, which serves markets for a specific purpose and then dis-

bands, are still a rare occurrence. Virtual collaboration within and between companies,

often organised around projects, is, on the other hand, widely accepted. In view of the

figures in part A of this report there is empirical evidence that about one third of the

entire European workforce is involved in some sort of tele-cooperation over distances.

A similar proportion can be estimated for other OECD countries such as the US, Can-

ada, Australia, or Japan. For example, Lurey and Raisinghani (2001: 525) cite a US

study estimating 30 million US workers as being members of dispersed teams by the

year 2000. Yet the geography of virtual links is not confined to the industrialised world.

Competition is forcing companies to move low-value-added phases of production to

low-wage countries, not in random fashion but to where production skills are already

concentrated. Hence, virtual teamwork of temporary duration, carried out by electroni-

cally connected co-workers irrespective of location, increases the ability of companies

(and networks of companies) to gain access to specialised knowledge. Another feature

of virtual teamwork is the capability of exploiting complementary time zones and

economise on product development time through a 24-hour workday, spread across

locations and people.

Within this chapter, following a general assessment of virtual collaboration, teamwork

in virtual environments is to be examined. First, obstacles and success factors for vir-

tual teams in general, and then, aspects of virtual teams that collaborate over national

borders and across different cultures are discussed. This literature review is accompa-

nied by experts interviews that CSI has carried out among large Austrian companies

like Siemens Austria and Austrian Airlines, both of which are maintaining virtual and at

the same time international project teams.

There is no doubt that a good working climate within virtual teams is increasingly be-

coming a crucial factor for knowledge-based organisations, especially for MNCs with a

globally dispersed workforce. To control the risks of virtual and cross-cultural collabo-

91

ration, a special sensitivity toward barriers and success factors is necessary – the

same holds true for team work in general. Moreover, the findings of this chapter refer

to all other chapters of this report; e.g. privacy: project leaders of virtual teams with

little or no face-to-face contact are recommended to encourage team members in dif-

ferent locations to provide personal data on project web-sites or intranets to establish a

feeling of virtual proximity and trust. This can conflict with employees’ privacy needs,

especially in cases in which the sensitive personal data provided is visible to persons

other than team members.

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B.6.1 Types of virtual teams

When defining and describing virtual teamwork, it is important to refer first to teams in

general, as virtual teams share most of the characteristics of traditional teams. In addi-

tion, in order to reduce complexity, we use the term “team” or “virtual team” only in the

context of professional working groups or task groups (e.g. working teams for software

development, research and development or sales teams). Generally, teams can range

from two to about 25 persons, otherwise they tend to divide up into sub-teams. Teams

need complementary skills or the right mix of skills to do the assigned job. These skills

fall into three categories: technical or functional expertise, problem-solving or decision-

making skills and interpersonal skills. A team’s purpose and performance goals belong

together, both must be clear or confusion will likely result. In addition, teams need to

develop a common approach or method on how they will work together to accomplish

their purpose. Finally, groups become teams when they hold themselves accountable

for the outcome (cf. www.seanet.com, www.virtualteams.com ).

Virtual teams differ from co-located teams with permanent physical meetings, as

groups of co-workers spread out over distances collaborate using telecommunication

links. Nevertheless, it must be mentioned that not all definitions of virtual teamwork are

limited to collaboration over distances. For example, virtual teamwork may be practised

by persons in different units of a large firm at the same location or team members may

work different shifts. Also, not all definitions include the use of some sort of groupware

like bulletin boards, video-conferencing or specific tools like Lotus Notes (i.e. in some

virtual teams only e-mail or telephone lines may be used). Nevertheless, when dis-

cussing issues, obstacles and success factors for virtual teamwork, it makes sense to

emphasise a certain degree of dependency on electronic devices along with geo-

graphic dispersion, as such teams primarily interact electronically and may meet face-

to-face only occasionally (or even never).

Table B.6.1 Challenges of virtual teams

Type of cha llenge Description

Communications • traditional social mechanisms are lost or distorted

• communication dynamics such as facial expressions, vocal inflections,

verbal cues, and gestures are altered

• distinctions among member’s social and expert status lost or distorted

• inhibition in building trust

• communication process dysfunction

Culture • potential for multiple cultures requires greater communication skills

• unrealistic cultural expectations

• communication may be distorted through cultural misunderstand-

ings/biases

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Logistics • multiple time zones make scheduling meetings as well as travel very

difficult

Technology • technophobia

• need for proficiency across a wide range of technologies

• team membership bias towards individuals skilled at learning new

technologies

Source: Kayworth, Leidner, Mora-Tavarez 2001: 6

In conclusion, we define virtual teams as teamwork at remote locations + telecommu-

nication links + (in most cases) groupware. “Working teams in general are groups of

people who share a common purpose or goal and interact interdependently within a

larger organisational setting. Unlike their conventional counterparts, virtual teams can

be dispersed across organisational, space, and/or time boundaries and are often

cross-functional in nature, where team members come from a variety of organisational

departments or business units” (Lurey and Raisinghani 2001).

There are many categories for distinguishing among different forms of teams.

Below, we mention only a few most relevant for virtual teams.

Process teams versus project teams

Process teams undertake routine and standardised activities or tasks. Process work is

the most common form of work, it exists in all organisations (e.g. assembly-line work,

bank and insurance office work, clerical work etc.) and has the following structure: it is

predictable, repetitive, standardised, takes a short time to conclude and maintains the

status quo of organisational processes.

Project teams are fundamentally different from process teams, as they undertake work

that is creative, dynamic and non-routine by nature: it is unpredictable, unique, difficult

to standardise, takes a long time to conclude and may change the status quo of or-

ganisational processes. Examples of project work include most IT work, filmmaking

and other artistic work, strategic planning, business process re-engineering and re-

search and development (cf. www.thomsett.com).

Degree of advanced technology use

Virtual teams are supported by both hardware and software. Software requirements

include electronic mail, groupware products like meeting facilitation software (e.g.

audio- or video-conferencing systems), group time management systems and further

tools, from simple mailing-lists to collaborative writing systems. Obviously, the degree

of advanced technology used may differ according to the differing goals of virtual

teams (e.g. software programming vs. collaboration of non-technicians). For example,

larger software development teams at different locations using different time zones to

94

reduce development times need standardised workflow applications, e.g. the daily

work of the software engineers doing the basic programming is forwarded to a central

host system, to which the test team has access, and the work is continued (e.g. Sie-

mens Austria with basic programming teams in India and test teams in Austria). Such

automatised daily virtual work routines with advanced technology and standardised

processes may entail completely different challenges and needs for further communi-

cation compared to virtual teams like sales group that have to report and co-ordinate

their work on a weekly or monthly basis using audio- or video-conferencing and e-mail

or telephony for further one-to-one communication. Hence, virtual teamwork can vary

to a large extent.

A recent survey of COLLABORATIVE STRATEGIES (2001) among 100 large US

companies representing multiple industries revealed that for 83% of the respondents

virtual collaboration is critical to the functioning of the company. Especially sales force

automation and distributed project management were two key functions for which col-

laboration was identified as critical. Inasmuch as collaboration is more prevalent within

a company than it is between companies, the authors found that most collaborative

functions were supported by intranets. The basic functions that US firms are supporting

in 2000 fall into 5 main categories:

• Document management: document publication co-ordination and routing, broad-

cast publishing

• Group calendaring/scheduling: staff and facilities calendar updates, meeting man-

agement support, including meeting facilitation, and support for virtual, remote or

distributed meetings

• Project management: workforce management and project co-ordination, including

distributed project management, support for mobile working, sales force automa-

tion

• Communication: information-sharing and threaded discussion forums, including

video-conferencing, collaborative working around a common “table”, accessing re-

mote and distributed applications, supporting key functions business processes

such as product development

• Knowledge management: sharing and recycling corporate knowledge, creating a

corporate memory, preserving intellectual capital.

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Figure B. 6.1: Groupware tools for communicati on, co-ordination and collabor ation

Source: GartnerGroup, cited in: Caucus 2000: 19

The figure B.6.1 distinguishes between communication (shared ideas), co-ordination

(shared creation) and collaboration (shared space) tools for virtual teams. As corpora-

tions need to solve increasingly complex problems among dispersed workgroups, dis-

tributed business units, and interdependent supply chains, the tools required for online

communication, too, are getting more complex. To date, most virtual interaction is pri-

marily conducted online using tools such as e-mail, chatting, instant messaging, dis-

cussion databases and bulletin boards that are not optimised for their task. While cur-

rent-generation communication tools are valuable and have their place, taken together

they may create a cacophony of disparate noises, rather than collaborative harmony.

They often have their own unique user interface, and data from one is not accessible

via another. Moreover, almost none of them supports true collaboration in an online

environment (CAUCUS 2000: 2).

According to CAUCUS, the next-generation Virtual Collaboration Application must be

designed based on a thorough understanding of the processes by which real human

beings collaborate in virtual environments. It must:

• create a true environment for collaboration, rather than a “web site”, “por-

tal”,“message stream” or a “filing cabinet”;

• map best practices in collaboration into the virtual environment;

• support complex webs of interconnected people, processes, and information;

• provide a sense of shared presence and support the building of ongoing relation-

ships in the online environment;

96

• integrate the best features of current-generation communications, e-commerce,

and data management tools;

• transcend the current dichotomy of synchronous/asynchronous communication and

support the emerging convergence of B2B, B2C, and B2E environments;

• allow people to collaborate whenever and wherever they are by supporting multiple

access modalities (e-mail, web, wireless, etc.);

• be a “blur offering” of technology, consulting, and training; and finally,

• it must put human interaction at the centre of the collaborative experience (CAU-

CUS 2000: 3).

Formal virtual work groups versus informal communities of practice

Within recent years, so-called “communities of practice” have come into the focus of

observation. In contrast to formally organised working teams with clearly designated

goals, membership and functions, communities of practice are more informal groups of

persons within or even outside a company that have similar interests, but do not work

together directly. Meanwhile, a range of large companies (e.g. global consulting firms)

are trying to install such CoPs, as it is widely recognised that they enrich organisations.

Lesser and Storck from the IBM Institute for Knowledge Management (2001) carried

out some case studies among multinational companies. They have identified some of

the specific business outcomes that are influenced by communities. These include:

• decreasing the learning curve of new employees;

• responding more rapidly to customer needs and inquiries;

• reducing rework and preventing “reinvention of the wheel”; and

• spawning new ideas for products and services.

According to Lesser and Storck, CoPs obviously work. However, what counts for all

virtual teams is also true for communities of practice: Management action is needed!

• Provide opportunities for individuals to make new connections (physical and/or vir-

tual).

• Allow time and space for relationship-building among individuals.

• Find ways to communicate the norms, culture, and language of the community and

the organisation (Lesser and Storck 2001: 840).

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Table B.6.2: Li nking business out comes with the dimensions of social capital by

usi ng Communit ies of Pract ice

Connections Relationships Common Co ntext

Decrease learning

curve

Find experts Mentor and coach

new employees

Understand rules of

the firm

Increase customer

responsiveness

Find individuals with

similar experiences

Develop willingness to

respond to random

questions

Understand the com-

mon language

Reduce rework and

prevent reinvention

Find artefacts and the

individuals who devel-

oped them

Establish positive

reputation

Understand situational

nature of knowledge

Increase innovation Leverage weak ties

that provide exposure

to new ideas

Build safe environ-

ment for brainstorming

and testing new ideas

Understand which

problems are of com-

mon interest

Source: Lesser and Storck 2001: 839

Degree of Difference: culture, language, organisation, function

To establish commonly accepted approaches and methods for providing goals and

performance is the central challenge all working teams are confronted with. But virtual

work, and virtual cross-border work in particular, in which team members with different

cultures and/or languages have to be committed to common goals, is an even more

complex phenomenon. There is some empirical evidence that more heterogeneous

teams (not only in terms of being multicultural, but with respect to all kinds of diversity)

can be more productive than homogenous teams due to multiple perspectives on any

given situation, yet they also risk experiencing greater losses due to faulty processes

(for more details see chapter B.6.3 below).

Case study: video-conferencing are not always what they appear to be

The international team arranges a video-conference using the most modern technol-

ogy. The participants, from the US, Brazil and Bulgaria, have not met each other yet.

You are the project manager. “Good day everyone. Are we ready for the conference?”,

you ask, looking into the camera. Everyone nods, except for the Bulgarian who shakes

his head. What’s his problem? Well, in Bulgaria shaking one’s head means “yes” and

nodding signifies “no”. Think of the misunderstandings that can arise if this gesture is

interpreted wrongly, particularly when the participant nods!? The conference continues.

You then ask, “Were all of the project reports okay?” Forming an “o” with his index fin-

ger and thumb, the American gives the okay-sign. The Brazilian appears shocked. In

Brazil, this sign means something like: “You asshole”. The conference continues ...Source: Bartsch-Beuerlein and Klee 2001: 24

98

B.6.2 Barriers and success factors for virtual teams

A majority of the literature discussing aspects of virtual teams and providing sugges-

tions on how to improve virtual working environments refers to communication technol-

ogy, i.e. provides suggestions on to install user-friendly groupware, knowledge-

management and workflow systems etc. Without a doubt this is important, as technol-

ogy is the backbone for virtual collaboration. Nevertheless, more concern for commu-

nication processes within teams is necessary, as mutual trust and confidence depend

largely on behavioural aspects, group mechanisms and management competence.

Although efforts must be made to explore how ICT systems can effectively engender

trust-building in virtual collaboration settings, it is always human beings that interact in

virtual teams - as in all teams. Trust relationships within flexible networks established

by teams within or across a company are inherently fragile. The real-time co-ordination

of work across locations poses challenges for management as well as incentives and

remuneration for virtual teams. For example, consider how differently the concept of

managerial “authority” evolves when management is anonymous rather than face-to-

face.

Trust, first of all, is a personal disposition that people possess to varying extents due to

individual socialisation processes. Second, trust in institutions and organisations varies

among countries and cultures (e.g. very high in Scandinavian countries, very low in

transition countries like Russia). Third, and most important, trust is a mutual relation-

ship between two or more persons that can be improved by appropriate measures.

Trust depends on the competency and willingness of others, while both traits are asso-

ciated with the degree of proximity and experience. Hence, due to the fact that project

work is carried out over distances for only a brief period of time and with only little face-

to-face contact, trust-building in virtual teams is more difficult than in co-located teams.

The following observations concentrate on empirical findings regarding barriers and

success factors for virtual teams, of which technology is only one part.

Reference models on team effectiveness integrate input, process and output factors

using a series of relevant variables, of which the following are most relevant:

• Input factors: group (selection of team, complementary competencies of team

members, cultural diversity), task (type of work, project duration), context (company

support mechanisms, reward system, leadership style), technology.

• Process factors: leadership and project management, internal group dynamics and

communication patterns, information access, cohesion, conflict resolution, project

team rules.

• Output factors: performance, job satisfaction

99

Figure B. 6.2: Team ef fectiveness – input, process and out put factors

Source: Lurey and Rainsinghani 2001: 525

In the meantime a series of empirical studies exists which attempt to discover the most

critical predictors for team performance by using complex models of correlation analy-

sis. Much of the data resulting from research on virtual team effectiveness suggests

that many of the issues that affect virtual teams are similar in nature to those affecting

co-located teams: „Organizations choosing to implement virtual teams should focus

much of their efforts in the same direction they would if they were implementing tradi-

tional, co-located teams“ (Lurey and Raisinghani 2001: 532):

• Team processes and team members’ interpersonal relationships represent the

strongest correlations to team performance and team member satisfaction.

• Selection procedures (group), companies’ support structures and leadership styles

(context) are important for effectiveness, although these associations are weaker.

• Regardless of the specific tasks, at the beginning of projects certain problems of

virtual collaboration are often underestimated, e.g. misunderstandings and mistrust

due to the lack of face-to-face meetings often become noticeable too late.

• Teams tools and technologies (e.g. groupware) are important, but show weaker

associations with team effectiveness than process factors and all other input fac-

tors. Access to information and resources for all team members as well as reliable

communication links are even more important than advanced groupware tools.

• Project management and sensitive leadership are more important in virtual teams

than in traditional teams. Codes of conduct with binding rules for virtual teams are

crucial from the beginning, for instance:

• Hold an initial face-to-face start-up; for long-term or permanent teams, establish a

schedule of periodic face-to-face-meetings.

• Establish interdependency among team members; make explicit the need for vir-

tual team members to nurture each other and create relationships.

• Agree not only on what, when, and how information will be shared but also on how

team members will respond to it.

• Establish clear norms and protocols for surfacing assumptions and conflicts.

100

• Recognise and honour diversity (cf. www.seanet.com).

• The most important guidelines for asynchronous communication are:

• “bulletin board, not mailing list”: information is stored in a database and queried

actively, thus reducing appreciably the amount of information sent to individual par-

ticipants

• agree on very specific rules for the process involving “sending – receiving – con-

firming” information, i.e. when and how to respond to messages.

Case study: e-mail netiquette at Procter & Gamble Germany

At Proctor & Gamble Germany, a giant in the chemical industry, the handbook on e-

mail etiquette comprises 41 paragraphs intended to make dealing with electronic mail

among the some 8000 employees easier. The regulations address issues such as

phrasing the subject, length of messages and attachments and selecting recipients for

distribution lists. The question of what to do when going on holidays or absent on busi-

ness trips is also treated in the handbook. The following is one of the most important

rules: employees shall respond to electronic mail from inside of the company within 48

hours. If that is not possible, then at least a confirmation of receipt should be sent

within this period. The message is then: mail received, answer forthcoming – pending

clarification.Source: Die Mitbestimmung 5/2002: 42

B.6.3 Barriers and success factors for cross-cultural virtual teams

Building effective virtual teams that can reach envisaged targets is a complex chal-

lenge that requires not only appropriate technology, but also substantial efforts in the

way of distributed project management, in order to guarantee interdependency among

team members, recognition of diversity and so on. Obviously, managing cross-cultural

virtual teams is even more complex, as members with different languages, cultural

habits and working styles come together. The following case study on a large German

high-tech company gives insights into how difficulties may multiply when cultural differ-

ences are not recognised at the very beginning of a cross-cultural collaboration project.

Case study: Internet communication within international teams can be tricky

Nothing. No minutes from any meeting did the project manager in Munich receive from

his staff in Asia and South America. Even though he had thoroughly discussed with

them how he intended for them to work together. For his job was not easy: his em-

ployer, a Munich company, manufactures parts for electrical appliances in 16 different

countries. His job was to co-ordinate the work of the 16 managers at these subsidiar-

ies. So, he had ruled that all of the managers on any one continent were to form a

101

team and meet regularly, holding regional video-conferences to discuss matters; the

team leaders were then to mail him the minutes of these meetings. A clear directive,

one would think. From Europe, Africa and North America the minutes arrived regularly.

But nothing of the kind came from Asia and South America.

Six months later the project manager in Munich called a meeting in Germany

attended by all and found out the cause for the silence: cultural differences masked by

Internet communication. It was the typical problem a so-called virtual intercultural team

comes against. Colleagues who communicate across international boundaries almost

exclusively with the aid of new media do indeed save time and money, but many times

they notice collective misunderstandings either too late or even not at all. The result is

then a multimedia skirmish or even silence on the net.

The South Americans, on the one hand, had their reasons for not sending the

minutes. Within so-called “palaver-cultures” communication works differently than it

does in Munich. All participants at a meeting speak at the same time – and, in so do-

ing, exchange ideas and thus reach a solution. Since for these individuals every con-

versation represents a process whose results are always tentative, the team leaders

were not used to documenting facts in the form of minutes. Behind any communication

difficulties among virtual teams are usually found varying ideas, dictated by culture, of

what working together is all about. What are minutes? Is the message “everything’s

fine” really information? Or who makes the decision when differences of opinion arise,

the majority or the team leader, or is everything simply postponed until a consensus

takes shape? Matters, which, from the outset, a mono-cultural team is implicitly agreed

upon, are tentatively undecided in an intercultural one.

A rough orientation, at least, within this cultural chaos is provided by the

scheme devised by Great Britain’s Richard D. Lewis. It is intended to help individuals

categorise their own cultural position. Lewis, a leading researcher in the area of

intercultural communication, distinguishes among three kinds of cultures: linear-active,

multi-active and reactive ones. Linear-active people like North Americans and Ger-

mans are interested in facts and get their information from databases or, of course,

written minutes. They do one and only thing at a time, everything in the order in which

they have entered them in their appointment calendars. Yet keeping appointments can

be threatened, if, for example, South Americans are found among their colleagues.

These are multi-active individuals who like to do more than one thing at a time and, to

top it all, in an unforeseen order. After all, appointments are artificial affairs, staged by

people; is it not then more realistic to deal with unforeseen events as they occur, to

take care of appointments as they come up? For this reason, while a multi-active co-

worker may join a video-conference an hour after it begins, in the meantime this per-

son has taken care of a couple of unexpected matters, and is quite satisfied in this

knowledge. Yet, this pattern of behaviour can pose a problem, particularly when deal-

ing with people from reactive cultures, such as Japanese or Finns. In contrast with

multi-active individuals, reactive people prefer to listen carefully first and develop their

102

own idea of what is going on before reacting. They dislike taking the initiative. How,

then, could an Asian team leader, on his own initiative, mail the minutes of a meeting

to Germany? Beyond this, as a matter of courtesy, reactive people use subtle ges-

tures, impersonal modes of speech and vague wordings – it matters less what one

says than how one says it. These habits of language were another reason that the

Asians’ video-conference was less than successful.

The cultural chaos that the project manager from Munich and his team discov-

ered at an intercultural workshop six months later was breathtaking: northern Europe-

ans and Americans, as it turned out, expected the video-conferences carried out by the

whole team to deliver first and foremost facts and results, the “palaverers”, moreover,

wanted to nurture contacts. The project manager labelled the Asian and South Ameri-

can team managers unreliable, while they, for their part, were proud to have acted loy-

ally toward their teams. The Asian boss, a Vietnamese with experience of communism,

even found it risky to divulge information to a project manager – who would then mail it

to 16 other countries!

What can be done in such a situation? “When many cultures are involved, it

does not make sense to explain all of the differences to each other,” suggests Andreas

Bittner from the Institute for Intercultural Management. Only a general awareness of

cultural diversity, mutual tolerance and personal meetings when conflicts arise can

help – along with unequivocal agreements. This might include a set of rules for com-

munication, laying down who is to use which medium to what end, what the minutes of

a meeting are to look like and whether or how to react to circular mails. “And at the

beginning of a video-conference the discussion leader should personally greet each

participant so that an awareness of who is participating can develop.” If very different

cultures are facing each other, it could be worthwhile entrusting those from the palaver-

cultures with the task of setting forth the rules of discussion. As long as a team con-

sists of individuals from less than 16 cultures, it may be helpful to talk about attitude

differences in detail.Source: Die Zeit 44/2001: 84

Among others, Nancy Adler argues that culturally diverse teams (involving both do-

mestic and cross-border multiculturalism) have the potential of achieving greater pro-

ductivity than homogeneous teams, but they also risk experiencing greater losses.

Thus, they are either very productive or very unproductive, but seldom in the middle on

the productivity scale. On the one hand, they can display multiple perspectives on a

given situation, i.e. more and better ideas, or limited groupthink. On the other hand,

multicultural teams have greater difficulty than their homogeneous counterparts in inte-

grating and evaluating these perspectives. “Studies show that members of multicultural

teams use more of their time and effort in creating cohesion and solidarity than do

members of homogeneous groups. If unmanaged, cultural differences can paralyze a

team‘s ability to act” (Adler 2002: 145).

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Adler sums up the most relevant losses due to faulty processes in culturally diverse

teams and then gives some hints on how to overcome these problematic issues using

sensitive project management (Adler 2002: 141 ff).

Special risks in culturally diverse teams

• Attitudinal problems: dislike and mistrust

Members of culturally diverse teams express higher levels of mistrust than do their

more homogenous counterparts. Team members often find themselves more at-

tracted to people from their own culture than to others.

• Perceptional problems: stereotyping

Team members often inappropriately stereotype colleagues from other cultures

rather than accurately seeing and assessing their skills. Mutual frustration resulting

in diminished productivity can be the result. For instance, team members generally

talk more to colleagues from higher status cultures than to those from lower status

cultures. They assume, usually subconsciously, that national stereotypes apply to

individual team members. Thus, in initial meetings, team members often inappro-

priately judge their colleagues from the economically most developed countries the

most favourably. Members of a team of engineers, for example, assumed their

American colleagues had more technological expertise than did their Moroccan

colleagues simply because Morocco is economically and technologically less ad-

vanced than the United States.

• Communication problems: inaccuracy, misunderstanding, and inefficiency

In linguistically diverse groups, some members must speak a foreign language or

use an interpreter. When all members do not speak the team’s working language

fluently, communication is slowed down. Furthermore, if team members are not

trained in recognising cultural diversity, misinterpretation is typical. Many Indian

team members, for example, look down when acknowledging authority, a behav-

iour many European and North American managers misinterpret as signalling a

lack of trustworthiness. As a result, European and North American team leaders

often fail to develop sufficient trust in their Indian colleagues to delegate to them or

share with them more than trivial responsibilities.

• Cross-cultural stress

Communication and perceptional problems and a lack of trust often cause addi-

tional cross-cultural or cross-border stress. Multicultural teams often exhibit symp-

toms of considerable social stress, including bickering, apathy, single-party (or sin-

gle-culture) domination of discussions, stubbornness, and reprimanding. Multicul-

tural teams often show a quiet climate of politeness and gradually increasing

friendliness. However, these rituals of politeness often merely reflect the team’s

superficial defence against weak cohesiveness. Ritual politeness leaves team

104

members frustrated and usually becomes yet another hindrance, blocking them

from realising high productivity.

Managing cultural diversity

After a culturally diverse project team is designated, group internal communication

processes begin to unfold. Whether teamwork is productive depends on sensitive pro-

ject management and necessary interpersonal skills for: recognising differences or

seeing situations from another person’s perspective; creating a shared social reality;

explaining problems appropriately; and establishing agreed-upon norms for interacting.

All this is easier said than done, but it is decisive to note that after a period of low pro-

ductivity due to misunderstandings and mistrust there is only a limited opportunity for

correction.

Hence, in multicultural teams the selection of appropriate team members is critical. In

general, two rules should be taken into account: first, when a task requires team mem-

bers to assume highly specialised roles, it is usually more advantageous to use a di-

verse team. When everyone must do the same thing or when team members work on

simpler tasks involving repetitive or routine procedures, work generally progresses

more smoothly if members think and behave similarly. Corporate consulting teams, for

example, generally work most effectively when they include a range of specialists –

finance, marketing, production, and strategy experts (Adler 2002: 149). Second,

whereas diversity is generally valuable during early project stages like planning and

developing, it becomes much less helpful during the final implementation or “action”

phase. Thus, during the initial phases of a project more effort should be put toward

bringing diverse group members together, enabling them to spend enough time at

face-to-face meetings (if possible) in order to define common methods and rules.

Table B.6.3 Eff ectively managing team diversi ty

Diversity can be most effective when: Diversity is least effective when:

Task: innovative Task: routine

Stage: divergence (earlier) Stage: convergence (later)

Conditions:

• differences recognised

• members selected for task-related abilities

• mutual respect

• equal power

• superordinate goal

• external feedback

Conditions:

• differences ignored

• member selected on basis of ethnicity

• ethnocentrism

• cultural dominance

• individual goals

• no feedback (autonomy)

Adler 2002: 149

105

Case study: EHPT – innovative in the management of teleworkers and virtual

teams

EHPT, owned by Ericsson (60 per cent) and Hewlett Packard (40 per cent), was

founded in 1993. EHPT creates solutions and provides software applications that en-

able content and communications service providers to run, bill and develop their busi-

nesses. The company with headquarters are in Sweden functions almost solely in a

teleworking mode. Its staff is distributed over 17 sites, from Paris to Kuala Lumpur and

Moscow and from Denver to Sao Paulo and Melbourne, with two bigger offices (staff

>100) in Grenoble (France) and Göteborg (Sweden). EHPT has, therefore, had to find

solutions to acknowledged obstacles to telework – fear of isolation: loss of visibility,

damaging career prospects; reticence of management for fear of losing control; cultural

and/or linguistic misunderstandings; and asynchrony due to different time zones.

To overcome these difficulties, EHPT has adopted an innovative management

model. The work is organized in virtual teams made of employees from different geo-

graphical sites. In addition to a team manager, there is a coach at each site who is

responsible both for the circulation of information and for work organisation. Special

attention is given to communication within the teams so as not to confuse work-related

communication with the build-up of interpersonal relationships and trust. The teams are

brought together at least twice a year, to strengthen social ties more than for profes-

sional reasons. Performance evaluation is a particularly difficult task when done at a

distance. To overcome this difficulty, the local coach and clients are involved and it

also entails a face-to-face interview with the team manager.

Upstream from management, recruitment strives to select candidates having

the ability to act autonomously as well as good communication skills and cultural sen-

sitivity. Management training is focused on coaching and the difficulties of telework.

When integrating new staff, instead of giving a briefing on company culture, the focus

is placed on adapting to the local context in order to minimise the feeling of isolation.

Careers and remuneration are managed locally to take into account the extremely

varied practices from one country to the other. They also take into account that the

demand for recognition is increased by the feeling of isolation and the autonomy of

each employee. Various financial tools (e.g. stock options) are used, collectively or

individually.Source: ILO 2001a: 158

The following summarises obstacles in virtual teamwork that arise when using DCT

(Distributed Cooperation Technology, i.e. groupware). Table B.6.4 gives an overview of

relevant barriers and refers at the same time to proposed measures for overcoming

them, which in part can also serve as good formulations for a code in this context.

106

Table: B. 6.4 Social barrier s and proposed measures for vi rtual teamwor k

Barriers Proposed measures

Fundamentals of culture and personal lifestyles

• DCT work environment challenges inher-

ited assumptions about work differently in

“individualistic” and in “collectivistic” cul-

tures

• Culture is pervasive and even more trans-

parent in DCT-work than in face-to-face

collaboration

• After extensive investment people often fail

to use the new technology

• Learn about culture as part of the training

for distributed working

• Discuss the new tools with the new users

• Examine health, security, social and envi-

ronmental implications of virtual work, not

just the use of technology, but its impact on

lifestyles

Impact from organisations

• Teamwork is not understood or supported

• Mismatch about who is part of the team

(members from vendors, consultants, sup-

pliers)

• Overprotection of information, or, con-

versely, too widely distributed information;

corporate intelligence or security suffers;

frustration and little value added from vir-

tual business networks

• Output-orientation vs. time-orientation

• Face-to-face meetings remain crucial be-

sides exchange of information via DCT

• Careful team selection, formation and ne-

gotiation of issues and trust building

• Building team culture, training of cultural

and social competencies

National or ethnic particularities

• Transborder issues: language, culture, life-

style, power imbalance ...

• In individualistic cultures facts, data, dead-

lines get things done; in collectivistic cul-

tures relationships, contacts, roles get

things done

• Help understanding your context, attach

contextual documents, graphics etc.

• Get a functional understanding about dif-

ferences in language and cultural styles

• Allow face-to-face team meetings

Gender differences

• Technology is “a guy thing”. Difficulties in

collaborating with groups due to misunder-

standings of the nature of commitments,

acknowledgements, use or abuse of hu-

mour etc.

• Examine and discuss communication styles

• Learn the advantages of different commu-

nication styles for reaching diverse team

members

Source: Simons 1998

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B.7 IT-Training

The high degree of innovation that characterises computer technology has substantial

implications for the working life. According to a recent estimation by ILO, approximately

80% of the technologies currently used at work will have changed by 2010 (ILO 2001:

240). A recent study by the U.S. financial consulting company Merrill Lynch on tech-

nology learning and education estimates that roughly 50 percent of IT employee skills

will become outdated in three to five years. This continuous innovation process makes

continuous employee (re-)training a central precondition of corporate competitiveness.

It is not enough to just have IT workers who are trained in one set of skills at one point

in time, rather workers must be constantly engaged in learning and upgrading their

skills profiles. Thus, companies must invest in their training or risk to have an IT staff

with obsolete knowledge.

Given the amount of employee fluctuation in the IT sector – 15 to 18 percent of people

currently working in entry level jobs were not in the same occupation 12 months earlier

(ITEC Strategy Group 1999: 15) – training investments furthermore provide an oppor-

tunity to strengthen an employee’s ties to the company: 49% of IT professionals inter-

viewed in the British ITEC Strategy Groups’ survey 1999 reported that training oppor-

tunities would persuade them to stay with an employer. Besides, the existing IT skills

gap in the Western world can be seen as a main reason why it lies in the interest of

companies themselves to invest in IT training: the EU-wide structural shortage in ICT

training within European educational system leads – according to an EC estimation –

to 1.2 million unfilled vacancies by 2002 (EC 1998). For the U.S., the Information

Technology Association of America’s survey found that “for every ICT job that exists

today, employers will attempt to fill another 1.6 positions this year” (quoted after ILO

2001: 219).

This high relevance of IT-training for large sectors of business together with the high

relevance of computer-related technology for e-work already mentioned in previous

chapters justifies a closer look at the topic. We review evidence on the status quo of

IT-training in terms of people trained, money spent and returns on investment in train-

ing. We also describe the kinds of training measures currently in use. Finally, we

sketch ethical issues related to training.

B.7.1 Quantitative evidence on IT-Training

Present situation

The global demand for IT training has been growing steadily over the last decade. The

Merril Lynch study already mentioned in the introduction estimates that the global

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training market will total about 300 billion dollars this year, expanding to 365 billion

dollars by 2003. However, a report by U.S. IT consulter IDC on the worldwide and U.S.

corporate IT education and training market of the present and future indicates that in

every region in which IDC covers IT training, analysts have revised 2001 market fig-

ures downward and lowered expectations for growth in 2002 (see www.idc.com). This

contrasts sharply with the previous years. According to IDC, companies spent 18 per-

cent more for IT training in 1999 than in 2001. The IT training market was still growing

in 2001, but more slowly, particularly in the United States.

Concerning the U.S. market, in an IDC survey from 2000 which queried 200 U.S. man-

agers responsible for purchasing IT training, nearly 95 percent of survey respondents

indicated that they’ve used at least one IT training service within the past year. The

most popular services include reporting and tracking tools, pre- or posttraining

mentoring and support, inventory and gap analysis, and custom curriculum design and

development (see figure B.7.1).

Figure B. 7.1: I T trai ning services in t he U.S

Source: www.idc.com

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In Europe, IT training too has increased in importance for both companies and gov-

ernments. According to a recent report by the EU’s working group on ICT-skills, em-

ployers by now have become much more aware of the need to update the skills of their

employees (see ICT skills monitoring group 2002). They are now more likely to see

training as an investment, not just a cost.

In some EU countries, including France, companies are legally obliged to invest a

minimum proportion of their revenue (1%) in employee training. In France, about 40%

of life-long learning courses for workers relate to training and up-dating ICT related

skills.

In the Northern EU Member States, the involvement of the government in developing

training schemes is greater than in the south. For instance, in the Netherlands, a Joint

Paper agreed between the social partners and the government focused among other

contents on ICT skills, including fiscal incentives for employers to train their employ-

ees, the introduction of a Personal Development Plan and Personal Development Ac-

counts. This account enables all employees and job seekers to save money for training

(possibly including IC training). Correspondingly, in Denmark IT training has become a

mandatory part of all vocational degrees. Concerning the British situation, the results of

the already mentioned study by the ITEC Skills Strategy Group 1999 indicate that

sizeable proportions of new job-entrants in Britain do not receive sufficient in-company

IT training, and the level of training for some employees is below the average for the

broad occupational categories to which they belong: Only 30% of software engineers in

IT services had received training recently, compared to 45% of those in all professional

occupations.

All in all, training initiatives have so far been identified in 12 of the 15 Member States.

Most of these programmes include the following types of actions (see European Com-

mission 2002b):

• Tax relief for companies investing in IT training or company obligation to invest in

employee IT training (France, Denmark, Norway, The Netherlands and soon Italy)

• General IT skills training for employees, using e-learning resources (e.g. Nordic

countries, the UK, Ireland, France, Italy), bringing IT trainers to the company to

teach employees (e.g. Greece), or sending the working force to designed ICT

courses imparted outside the time work schedule (e.g. Austria, France, Germany)

• Specialised IT courses for employees (UK, Ireland and Nordic countries).

Case Study: Internet training at Liverpool John Moores Univer sity

A three -hour course called „Exploring the Internet“ has been developed by the univer-

sity’s department for Learning & Information Services for staff and researchers as a

part of a programme of IT skills-based courses. This continually developing course is

110

intended for those who are new to the internet. It aims to provide everyone with suffi-

cient knowledge to

• use the institutionally available browser

• search out relevant information

• gain a general awareness of „what's out there“.Source: http://materials.netskills.ac.uk/case-studies/cs1.html

Public-private partnerships in developing IT training programmes have also been de-

veloped in some European countries. Often, the public sector will provide funding and

the private sector will deliver the course content. A successful example of a scheme

working with SMEs is SKIN in Germany, a Skill Improvement Network. SKIN is a pro-

gramme that is primarily driven by the private sector and is very focused on its target

group – people already in SMEs looking to re-train and extend their IT skills. Its com-

bines distance network-based learning and local classroom training and the course

participants use material from Microsoft’s official curriculum and Cisco’s Networking

Academy programme and access to accreditation.

Future possibilities

How will the IT training market develop over the next years? The IDC report already

mentioned predicts that the worldwide market for IT training will soon begin to fare

better, and anticipates a compound annual growth rate of 11.2 percent through 2006.

IDC credits the slowdown in IT service and software spending for having adverse ef-

fects on the rate of IT training, but expects that better times are ahead. The recent

economic slowdown has caused a deceleration in the outsourced corporate training

market rather than a contraction, and IDC therefore remains cautiously optimistic that

double-digit growth in the market will soon return.

Reasons for employers to invest in training

Given that IT training has gained so much popularity among employers, what reasons

do they give for making training investments? Almost unanimously, studies have con-

cluded that enterprises are interested in training as a means of securing improved

workplace performance and greater profitability (Moy and McDonald 1999; Office of

Training and Further Education 1998; Billett and Cooper 1998).

In an international study covering the EU member countries, Coopers and Lybrand

(1996) found the majority of enterprises believe that training their employees brings

returns in the form of:

• productivity improvements,

• greater workforce flexibility,

• savings on material and capital costs,

• a more motivated workforce, and

111

• improved quality of the final product or service.

An earlier study by Carnevale and Schulz from 1990 came up with the very similar

findings that training typically benefits firms through:

• increased revenue and lower unit costs resulting from increased productivity of

capital and labour,

• reduced expenses resulting from less wasted time and materials, less absenteeism

and fewer accidents, and

• difficult to measure improvements in productive culture, such as greater employee

flexibility and improved employee morale.

Returns on investment in (IT- )training

What evidence exists to jugde to which degree the expections employers hold towards

training are justified? What returns on investment (RoI) in IT training measures can

they expect?

Unlike other expenses, training expenditures represent an investment by the firm in

their employees. As with any other investment, a commitment to training is directly

related to the expected returns from each dollar invested.Assessing the value of these

returns has been the subject of a large body of international research (e.g. Bartel 1994,

1995, 2000; Barrett/Hovels 1998; Leimbach 1994; Schneider/Monetta/Wright 1992;

Stolovitch/Maurice 1998). The results from this work provide evidence across a range

of sectors that training investments can yield very high levels of returns for firms, vary-

ing between 30 and 7000 per cent.

The returns on training investments are not always in the form of direct increases in

labour productivity or profitability, which have been the usual variables that researchers

in this area have been concerned to measure. It can also result in

• higher levels of value added activities – e.g. IT-related tasks – as a result of higher

skill levels

• greater employee flexibility

• reduced overhead costs to through more efficient use of existing facilities, lower

consumable costs and reduced human resource expenses

• greater ability to innovate in terms of adopting new technology and introducing

better forms of work organisation

• training makes the introduction of changes in the company generally more suc-

cessful

• training yields particularly high returns when it is linked to technological change.

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B.7.2 IT Training methods

The increasing need for continuous IT training is to an increasing extent met through

innovative training methods. Two examples:

E-learning

This new way of organising training which mostly combines direct trainer-trainee

interaction with online co-operation periods is generally believed to have substantial

potential in

• reducing the costs of workplace-related education and training

• saving time otherwise needed for getting to and from training locations,

• offering potentially universal access to best-in-class learning content available

worldwide.

According to Gohl and Pichler (2001), the amount of e-learning has risen by 117 per-

cent from 1999 to 2002. The authors found that the percentage of organisations using

the Internet for training purposes grew from 3% in 1996 to 38% in 1999. For intranets,

the rate of growth was even higher, from 3.5% to nearly 40%. Web-based training is

expected to rise by more than 900% between 2000 and 2004. According to IDC, over

twenty-seven percent of business skills training in Europe will be provided via e-

learning by 2005. This would entail a compound annual growth rate of 108.2 percent

for the European e-learning market between now and then. E-learning adoption and

development is most advanced in the Netherlands, Scandinavia, and the UK. Con-

cerning training costs, studies show that “corporations save between 50 to 70 percent

when replacing instructor-led training with electronic content delivery.” E.g., IBM could

save 24 million dollar through introducing a training system mixing 75% e-learning with

25% direct interaction (Gohl and Pichler 2001).

Reverse Mentoring

Reverse Mentoring means that younger employees are training older executives in

dealing with new technologies and business practices. Gohl and Pichler (2001) point to

this new trend in U.S. and international companies and mention Best Buy Co. Inc,

General Electric, Procter&Gamble or Siemens AG as examples for companies using

this instrument. Both parts of a reverse monitoring relationship benefit from it, as young

employees get in touch with important executives, and executives get in tune with IT-

related novelties. It is therefore expected to spread further in the future.

Case Study: Wilsons Leather's IT-training solution

Wilsons Leather, an international specialty retailer of leather outerwear, sportswear,

and accessories, was in search of a corporate-wide training program that was best

suited to help train its associates throughout all of its business segments. The com-

113

pany wanted to maximize productivity and job satisfaction by implementing a program

that would enable associates to develop their computer skills and strengthen their

professional development. They also wanted to provide a cost effective training solu-

tion employees could utilize at their own pace, without conflicting with other work ac-

tivities. In addition, they wanted to avoid spending a lot of money on employee travel

and the hiring of instructors. The company recognized that Web-based training could

offer a cost-effective approach that enabled everyone access to training regardless of

where they were located.

Wilsons Leather selected an e-learning solution that compelling enough to engage its

people and offer the richest, most varied curriculum-one that went far beyond just

technical training. The courses offered were especially user-friendly, particularly to

those who had little experience with computers. After completing the course, associ-

ates could follow up with an assessment to ensure they were grasping the critical com-

ponents.

„Computer skill levels among our associates vary greatly and we believe it's really im-

portant for everyone to feel comfortable using today's technology“, said Russ Edwards-

Simpson, Director of Human Resources at Wilsons Leather. „Some of our associates

really needed to learn the basics and the courses helped them achieve this. We feel it

is important to provides our associates with the tools they need to facilitate their own

career development.“Source: Element K Corporate Case Study (www.elementK.com)

B.7.3 Ethical issues related to IT-Training

How can IT training be organised in a way that fairly balances employer and employee

interests? We will now briefly sketch three issues in relation to this question.

Paying back training costs

Training investments in general raise the problem of how to handle their costs in case

of an end to the employment relationship: To what extent should employees be obliged

to pay back the costs of their training? According to the already mentioned report by

the EU Commission’s working party on ICT skills, it is increasingly accepted among

employers that training benefits everyone, not just the company concerned. Even if

employees move on within two years, they bring those skills to another employer and

are probably replaced by someone who has benefited from training elsewhere. Never-

theless, regulations regarding the employee’s duty to pay back training costs after the

end of employment are still quite common.

Our interview partner from the Austrian Union of Salaried Employees (GPA) indicated

that the most acceptable solution for employees consists in making the amount of pay-

back dependent on the time of employment: The longer an employee stays with an

employer, the less of his training costs he has to pay back in case of termination of

114

employment. After a sufficient amount of years, the payback sum even falls to zero. In

the case of company-specific training imparting only company-specific skills, no pay-

back at all is justified. A potential alternative would consist in a training fund into which

employees pay shares of their income, enabling them more substantial independence

from their employer. Such a solution however does not seem to be common anywhere

across Europe or elsewhere.

Broadness of corporate training

Companies have also been critisised for too narrow, too company-specific IT training.

According to Australian Labor's education spokesman Michael Lee, „some company-

based IT training does lead to secure employment (...) but it is also important that

young people have the opportunity to learn IT skills that would allow them the widest

poss ib l e cho i ce o f emp loymen t i n f u tu re yea rs “ ( see

http://workers.labor.net.au/114/news1_trai-ning.html). It has accordingly been argued

that training measures should balance the company’s interest in imparting specific

skills to its employees with the possibility for employees to acquire skills they can also

use for other employers.

Training instead of replacing

From an employee point of view, it appears highly desirable that employees get the

opportunity to update their skills instead of being replaced by new employees. There is

some evidence that especially older members of the workforce may not have the op-

portunity to up-date their skills and knowledge (ITEC Strategy Group 1999). As the

workforce in the Western world is generally ageing, training older employees might

however also be reasonable from the standpoint of the company: While presently 67%

of employees in the IT industry are aged between 25 and 44 and 90% are under 50,

there will be 3 million fewer new entrants to the workforce in Europe by 2020 and those

aged over 50 will increase in number by 9.6 million (European Commission 1998,17).

Besides, it appears shortsighted to build mainly on newly recruited employees, as it

takes six months or more for them to become fully productive (ILO 2001: 231).

Moreover, if companies employ IT-trained immigrants instead of training their own

staff, this can cause a major loss of valuable intellectual capital for the developing

countries the immigrants come from. A number of reports refer to the high costs of

“brain drain”, especially for the lowest income countries. For example, during the pe-

riod 1964–86, 58.8% of graduates in computer science from the Indian Institute of

Technology migrated abroad (ILO 2001: 223). The ILO data show India’s difficulty to

retain its best talents given the high global demand for skilled IT workers. For example,

• Germany is offering 20,000 “green cards” for software workers,

• Japan is seeking 10,000 IT workers over the next three years,

• Ireland is intending to recruit 32,000 by 2005,

• France 10,000; Italy 8,000; Republic of Korea another 10.000.

115

Although not indicating precise figures, other countries, like Belgium, Iran, Singapore,

Spain and Syria also report interest in importing Indian IT-graduates. In the Western

host countries, organisations representing workers such as the U.S. Software Profes-

sionals’ Political Action Committee critisise employers‘ tendency to favour immigrants

and replacing domestic workers with lower paid foreign workers, who are prepared to

work in the United States for 40 percent of current United States salaries (see

http://www.zazona.com/ShameH1B/Library/Archives/Softpac/Syntel.htm).

Case Study: Siemens Environmental Systems Ltd

SESL is part of the multinational Siemens organisation that employs 350,000 world-

wide including 14,000 people in the UK. The company has some 150 staff based at

Poole. The company is a major player in the field of environmental protection and de-

velops and manufactures products and systems that detect radioactivity, gas leaks and

the contamination of water and air. The business works in partnership with other com-

panies, research organisations, government departments and agencies. The company

develops new technologies and designs and manufactures innovative environmental

products.

Siemens pursues an active policy of training to ensure staff have the IT skills relevant

to their role in the company. This includes training in all standard office applications

such as Word Excel and Access. Training courses were developed that fulfilled the

needs established. Some 25 SESL staff attended the training courses in Word, Ac-

cess, Excel, MS Project, Front Page and Visio. According to Personnel Officer

Suzanne Jones, “the courses have provided improved competency in the applications

and the ability to support others in the use of the package, as well as improved accu-

racy and efficiency.” “The courses are frequently run and there is the flexibility to tailor

courses to the company's and the individual's needs. Feedback from delegates is al-

ways very positive. The trainers are very good, as are the facilities.”Source: Deverill Training Case Studies (www.deverill.co.uk)

116


UNI-Telefonica Code of Conduct:

All workers shall be given the opportunity to participate in training programmes espe-

cially those meant to improve workers skills to use new technology.

Standard Chartered Group Code of Conduct:

As a world-class organisation, Standard Chartered recognises it is essential we have

the best people equipped with the right skills and knowledge to perform their roles to

the highest standards.

We want talented professionals, who seek self-development opportunities including

continuing professional development. In return we offer excellent training and devel-

opment. We focus development on where we believe we will get the greatest return, by

developing employees' strengths.

We utilise a full portfolio of learning resource such as in house programmes, external

providers, on the job training and computer-based training. We sponsor employees for

professional qualifications on a part time basis, as well as in their own time.

We have Learning Resource Centres in major locations. Other centres are being de-

veloped and will provide employees with the opportunity to update their skills on vari-

ous software packages, use the Intranet, the Internet and gain access to books.

117

B.8 Cross-cultural diversity in the light of business ethics

As spearheads in the globalisation movement, companies need to understand some-

thing about cultural diversity when operating worldwide. Promoting implementation of

codes of conduct that do not seriously respect different cultural perspectives risks wid-

ening misunderstandings and setting the stage for hostilities that could otherwise have

been avoided. In discussing dimensions specific to culture, we do not wish to surrender

for cultural reasons to the temptation of systematically denying the applicability all eth-

ics in business conduct, based on cultural arguments. The central concern of this

chapter is to describe how different cultures can influence a global approach to ethics

programmes, thereby contributing to an awareness of cultural diversity.

Companies tend to act in self-referential ways by enforcing their own value and interest

systems on employees. Hence, any initiative in business ethics can be assumed to

more often reflect the business culture developed within the particular organisation and

to neglect cross-cultural aspects as far as business partners and sub-contractors with

different organisational structures and cultural backgrounds are concerned. The exis-

tence of cultural variation implies that MNCs risk failing to achieve their purpose when

formulating codes reflecting western cultures. Practices which are appropriate in one

culture setting may violate the established understanding regarding organisational and

social life in another cultural context, resulting in managerial conflicts and in rejection of

the code as such. A sound, world-wide approach to management ethics will need to

address the question of how to encourage ethical behaviour in organisations involving

different configurations with respect cultural characteristics.

Two fundamental differences between global and domestic organisations are geo-

graphic dispersion and multiculturalism. Multiculturalism means that people from more

than one culture interact regularly. To successfully manage geographic dispersion and

multiculturalism within MNCs, managers must develop a global mindset (Adler 2002:

15).

B.8.1 Definition of culture

After cataloguing more than 100 different definitions of culture, Kroeber and Kluckhohn

(cited in: Adler 2002: 16) have offered one of the most comprehensive and generally

accepted definitions: “Culture consists of patterns, explicit and implicit, of and for be-

haviour acquired and transmitted by symbols, constituting the distinctive achievement

of human groups, including their embodiment in artifacts; the essential core of culture

consists of traditional (i.e., historically derived and selected) ideas and especially their

attached values; culture systems may, on the one hand, be considered as products of

action, on the other, as conditioning elements of future action”.

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• According to Trandis (2001: 74): “Culture is a shared pattern of categorisations,

attitudes, beliefs, definitions, norms, values and other elements of subjective cul-

ture”.

• BT – Variety and values (2001: 7) asserts: “Cultures are made up of a complex of

individuals and behaviours within a common framework.”

• According to Brown (1976, cited in: Adler 2002: 16): “Culture is something shared

by all or almost all members of some social group; something older members of a

group try pass on to younger members; something (as in the case of morals, laws,

and customs) that shapes behaviour, or ... structures one’s perception of world.”

• Hofstede (1980, cited in: Adler 2002: 16) observes that managers frequently see

culture as: “the collective programming of the mind which distinguishes the mem-

bers of one human group from another ... the interactive aggregate of common

characteristics that influence a human group’s response to its environment.”

Adler (2002, 16) defines the cultural orientation of a society as “the complex interaction

of values, attitudes, and behaviours displayed by its members”.

• Values: a value is that which is explicitly or implicitly desirable to an individual or a

group and which influences selection among available modes, means, and ends of

action. Latin American managers, for instance, consider the value “loyalty to the

family” as highly important, whilst US managers strongly believe in individual

achievement. Korff et. al. (1999: 202) describe four dimensions in value conflicts

within international business operations: a) different political concepts and inter-

ests; b) different social behaviour and social systems; c) different norms and stan-

dards concerning natural environment and safety; d) different cultural traditions and

expectation of behaviour.

• Attitudes: an attitude expresses values and disposes a person to act or to react in a

certain way. For example, market research has shown that French Canadians have

a positive attitude toward pleasant or sweet smells, whereas English Canadians

prefer smells with efficient or clean connotations.

• Behaviour: behaviour is any form of human action. As a result of their culture, Latin

Americans, for example, touch each other more frequently during business nego-

tiations than do North Americans, and both touch more frequently than do Japa-

nese (Adler 2002: 17).

In a manner analogous to the recognisable loss of biodiversity, the loss of cultural di-

versity increases political and economic instability. The tensions between Western

cultures and others, as highlighted by the terrorist attacks on New York City and

Washington, D.C. in September 2001, evidence the growing uneasiness in the face of

a perceived dominance of Western cultures. The developing world increasingly finds its

values, beliefs and cultures overwhelmed by the Western cultures – as a result of

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globalisation. Onuman Yasuaki (quoted from Bauer and Bell 1999: 10), professor of

international law at the University of Tokyo, criticises the quest for universalising West-

ern values: “There is little room left, [...] to think that something non-Western can be

universally valid and that Western outlooks may be unique to particular societies.”

Symptomatic for the loss of cultural diversity is the endangerment of languages: up to

half of the approx. 65,000 languages now spoken are on the brink of extinction. Many

observations suggest that we may lose over 90% of the world’s languages during the

next century; only a few hundred will survive. In fact, more than a quarter of the world’s

population now speak English (cf. BT – Variety and Values 2001: 10). With this disap-

pearance of languages, entire cultures may vanish.

The European Commission recently added “cultural sustainability” to the concept of

sustainable development as a fourth dimension. In light of the attacks on New York

City and Washington D.C. in September 2001 “it is high time” to recognise that the

respect of cultural identity and diversity is crucially important, since no safeguards

protect cultural differences against conflicting interests. The debate about how to

maintain cultural diversity and identity must take into account “not just the recognition

of differences, but equally the existence of a common set of values, such as the re-

spect for human life and human dignity, freedom of religion, freedom of information,

and the right actively to participate in one’s own culture” (European Commission

2002c: 16).

B.8.2 Cultural variation

Differences in work-related attitudes exist across a wide range of cultures. Geert

Hofstede (1991, cited in Adler 2002) surveyed 160,000 managers and employees in

more than 60 countries working for an American MNC. According to this study, national

culture explains 50% of differences in employees’ attitudes and behaviours, more than

does professional role, age, gender or race. He found significant differences in behav-

iour and attitudes along four primary dimensions: a) individualism/collectivism, b)

power distance, c) uncertainty avoidance and d) career success/quality of life. Addi-

tional dimensions of cultures are e) contexts of communication (Weaver 2001), f) con-

ception of managers and manageability (Laurent 1983), and g) conceptions of rules

and relationships (Adler 2002).

a) Individualism versus collectivism

Social life and personal identity determine the distinction between “individualistic” and

“collectivistic” societal cultures. Individualism subordinates collective purpose to per-

sonal goals, while collectivism does the opposite. Collectivists hold common goals and

objectives, not individual goals that focus primarily on self-interest. In collectivistic so-

cieties, self-identity is constituted by the group and in-group/out-group distinctions are

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an important part of one’s understanding of the world. Members of collectivistic cul-

tures place more emphasis on fitting in harmoniously and preserving behaviour pat-

terns. Members of individualistic cultures place more emphasis on individual self-

respect. Examples of collectivistic cultures might be China or Korea, whereas USA,

Sweden, or Australia are seen as individualistic cultures.

Trompenaars and Hampden-Turner (1998, quoted after Adler 2002: 55) found that

managers worldwide vary markedly in their orientation towards individualism or collec-

tivism. Among other questions, they asked managers which of the following two op-

tions would be most likely to improve the quality of life:

1. Giving individuals the maximum opportunity to develop themselves

2. Having individuals continuously take care of their fellow human beings

The vast majority of American (79%), Canadian (79%) and Norwegian managers

(76%), for example, selected the first option stressing individual freedom, whereas

most managers in Nepal (69%), Kuwait 62%), or Egypt (59%) selected the second

option stressing collective responsibility.

Table B.8.1 Dif ferences bet ween i ndividualist ic and collectivistic cultures

Dimensions Individualism Collectivism

Self Autonomous from in-groups Dependence on in-groups

Goals Personal goals are given priority

over in-group goals

In-group’s goals are given priority

over personal goals

Tradition / hierarchies Less sanguine about hierarchies

and social tradition

Acquiescence to hierarchical, tradi-

tional and communal relationships

Interpersonal relation-

ships

more typically enter into short-term,

exchange-based relationships and

are more competitive

Conflict behaviour Prefer direct communication in con-

flicts (adversarial approach)

Prefer to avoid conflicts or that they

not be brought into the open (con-

ciliatory approach)

ValuesPersonal freedom, recognition, sat-

isfaction

Harmony, face-saving, fulfilment of

others’ needs

Case study: The Pacific Area Travel Association

A global market research firm in Tokyo conducted a survey of travel market potential

for the Pacific Area Travel Association (PATA), an organisation comprising the national

tourist offices of various Pacific Rim nations. In addition to a standard questionnaire,

each nation was invited to submit a few of its own open-ended questions. Of the ten

countries surveyed, the US Department of Commerce was the first to send in ques-

tions. Individual names were always attached to each letter when they were faxed from

the US. The southeast Asian nations required more time, because the research firm

121

had to exchange many letters and faxes with the Philippines and Tokyo before it re-

ceived their final responses. In analysing these responses, the survey researchers

concluded that the contrast between the Americans’ and the Filipinos’ responses to the

same task stemmed from the relative emphasis on the individual versus the group.

Whereas the US office gave sole responsibility to one individual, the more group-

oriented Filipinos delegated the task to a whole department. Since the Philippines of-

fice involved everyone in the task, it naturally took longer.Source: Adler 2002: 56

b) Power distance

A culture’s power distance indicates the extent to which a society accepts the fact that

power in institutions and organisations is distributed unequally. In high power distance

countries, like France, Poland, Venezuela, India, and the Philippines, there is accep-

tance of inequality and respect for the bounds of social status or class. Employees

either tend to view their organisations as traditional families by which they expect to be

physically and economically protected (e.g. Singapore, Philippines) or view their or-

ganisations as a pyramid of people in which communication runs in formal, vertical

lines (e.g. former Yugoslavia, Mexico). When negotiating in high power distance coun-

tries, companies find it important to send representatives with titles equivalent to or

higher than those of their counterparts from other organisations. By contrast, in low

power distance countries, like the US, Israel and Denmark, society is likely to value the

minimisation of inequalities, superseding status and class roles, relatively informal re-

lations across social levels and a more diffuse assignment of blame for failings. Their

organisations have flat hierarchies, everyone talks with everyone else and risk-taking is

both expected and encouraged. Titles, status, and formality command less importance

in low power distance countries.

Case study: An American executive in London

An American executive moved to London to manage his company’s British headquar-

ters. Although the initial few weeks passed relatively uneventfully, it bothered the ex-

ecutive that visitors were never sent directly to his office. A visitor first had to speak

with the receptionist, then the secretary and then the office manager. The American

became annoyed with this practice, which he considered a total waste of time. When

he finally spoke with his British employees and urged them to be less formal and to

send visitors directly to him, they were chagrined. After a number of delicate conversa-

tions, the American executive began to understand the greater emphasis on formality

and hierarchy in England.Source: Adler 2002: 57

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c) Uncertainty avoidance

This dimension reflects the extent to which a society feels threatened by ambiguity. In

high uncertainty avoidance cultures, ambiguous or unpredictable circumstances pro-

voke anxiety, and in consequence attempts to minimise it. High uncertainty avoidance

invokes efforts to gain stability based on formalised systems, rejecting deviant ideas

and behaviour while accepting the possibility of identifying absolutes. In countries like

Greece, Japan and Portugal, managers tend to attain unquestionable expertise. In

return, they are providing their employees greater employment stability. High job mo-

bility, on the other hand, occurs more commonly in low uncertainty avoidance countries

such as Denmark, Singapore and the USA.

Employees in high power distance countries tend to view their organisations as pyra-

mids of people; everyone in the organisation knows who reports to whom, and formal

lines of communication run vertically, up and down the organisation, never horizontally.

In high uncertainty avoidance and low power distance countries such as Israel and

Austria, organisations tend to resemble “well-oiled machines”: they operate highly pre-

dictably without needing a strong hierarchy. Most North American post offices provide

excellent examples of this type of organisation: they reduce uncertainty by clearly de-

fining roles and procedures.

d) Career success and quality of life or masculinity vs. femininity

Societies differ from each other in that some focus more narrowly on career success

while others broadly emphasise quality of life. Career-success cultures are more mate-

rialistic, i.e. oriented toward acquisition of money and things, focusing on competition

and advancement while emphasising little concern for people. A further characteristic

is the rigid definition of women’s and men’s roles, in that women are expected to stay

at home without pursuing a professional career. In this respect, the US, Austria and

Japan are seen as “masculine” cultures, which define women’s and men’s roles more

rigidly. In contrast, quality of life cultures emphasise relationships among people, hu-

man needs, care, and the overall quality of life. In such a “feminine” culture gender

roles are less narrowly defined and women are expected to work (e.g. Sweden).

The career-success / quality-of-life dimension strongly affects workplace motivation.

For example, Japanese quality circles primarily strive to achieve maximum quality (ca-

reer success / high uncertainty avoidance), whereas the innovative Swedish work

groups – originally used at Volvo – attempt to enhance job satisfaction and flexibility

(high quality of life / low uncertainty avoidance).

Case study: Swedish managers’ “inadequate” business commitment

Swedes frequently surprise their international clients when they end the work week on

Friday at 5 p.m. or announce their intention to fly home at the end of the day because

123

they want to spend more time with their families. Swedish businesspeople describe

many of their international colleagues, especially Americans, as willing to work the

whole evening or weekend just to finish an important project. Americans, on the other

hand, frequently resent the Swedes’ behaviour, judging it to reflect an inadequate

commitment to work. In actuality, the Swedes’ choices simply demonstrate their strong

commitment to quality of life, whereas the Americans and other similar foreigners be-

have according to their equally strong commitment to a particular project.Source: Adler 2002: 63

The following figure provides on overview of the findings on dimensions of cultural di-

versity described above applied to Asian and Western cultures.

124

Figure B. 8.1 Asian cultures versus West ern cultures

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v6g�w w juqxn=c yPc m?zBm { p,l�c y�c l7|7o�w c m}z

~?j�z9c p�c puc n�� o�mPq@|�w c p�c nI�

b6c dLe&|�puqQj@k n=o�c p�nI��o<y�guc l,o�p�q�j r@gihs|@puqQj�k n=o�c p�n ��o=y�g�c l�oup�qQj

r�g7p�d�n=j@k�z�g�k�c j,p<n=o�nFc gup ��e�g�k n�n=j@k�z�g@k�c j@pin;o�n=c g�p�6mXc o�p9q�|uw nF|�k�jQmX��e�j@k�j��ouw �QmXc o��?�Cc p<d?o7f�g@|uk��i�}e,o,c w oup�l��jQm@nFj�k�p9q@|uw nF|@k�j<m��e@juk�j��:��>�?�>j�k�z�o,p<�

Source: Reineke/Fussinger 2001: 98 (based on data of Hofstede)

e) High-context versus low-context communication

Drawing on Hofstede’s findings, Weaver (2001: 7f) adds the cultural dimension of

contextual communication in business management. A low-context culture is charac-

terised by less attention to subtle messages and clues from other people (e.g. US,

Germany). Thus communication is primarily based on spoken and written media and

context is relatively insignificant for understanding the meaning of a message. A high-

context culture is strongly based on personal relationships and may prove highly at-

tuned to multiple forms of communication including non-verbal signals, e.g. eye con-

tact, motion, barely audible sounds, etc. (South America, Asia). Here, conversely, un-

derstanding a message is dependent on contextual factors.

f) Conceptions of managers and manageability

Laurent (1983, quoted after Adler 2002: 48ff) found cultures often hold varying views

on the role and practice of management: managers are either assumed to be experts

who know the solutions to organisational problems or, on the other hand, are treated

as persons who only know how to orchestrate a process, generating in turn a solution

to a problem. Cultures also differ according to whether managerial expertise may be

tested. In some cultures, posing “unanswerable” questions to a superior represents

insensitive, inappropriate behaviour on the part of a subordinate. More than four times

as many Indonesian and Japanese managers as US managers agreed with the state-

ment, “It is important for managers to have at hand precise answers to most questions

125

their subordinates may raise about their work.” US managers define their role as that of

a problem solver whilst the French see the manager as an expert.

Figure B. 8.2: The manager’s role varies across cult ures ( %)

�?� �?� �?� �6� � �� ?� �6�

� ��?�

� ��?� �?�

��?�� ?��?��?�

Sweden

Netherlands

United States

Denmark

Great Britain

Switzerland

Belgium

Germany

France

ItalyIndonesia

SpainJapan

"It is important for managers to have at hand precise answers to most questions their subordinates may raise about their work".

Source: Adler 2002: 50

g) Conceptions of rules and relationships

The concept of universalism / particularism may be related to the cultural dimension of

individualism / collectivism in analogous fashion. According to Adler (2002), universal-

istic cultures, such as Canada and the United States, believe that laws apply to every-

one and they therefore must be upheld by everyone at all times. The “universalistic”

principle of what is legal, and therefore binding, takes priority over particular details of

who is involved in the specific setting. Rules are seen as applying equally to everyone

with no differences arising from one’s relationship to a particular person. In particular-

istic cultures, in contrast, such as South Korea and Venezuela, the nature of relation-

ships determines how someone will act in a particular situation. In such a culture it

makes a difference whether someone has a close relationship to another person. This

principle may dictate that loyalty is more important than truth.

The following example gives an impression of what is meant by universalistic or par-

ticularistic cultures. Trompenaars and Hampden-Turner (1998, quoted in Adler 2002:

64) asked more than 15,000 managers in 40 countries to consider what they would do

in the following situation:

“You are riding in a car driven by a close friend. He hits a pedestrian. You

know he was going at least 35 miles per hour in an area of the city where

the maximum speed is 20 miles per hour. There are no witnesses. His

126

lawyer says that if you testify under oath that he was only driving 20 miles

per hour it may save him from serious consequences. What right has your

friend to expect you to protect him?”

More than 90% of managers in Western cultures said that society’s rules were made

for everyone and are not willing to protect friends; therefore, they can be seen as pro-

tagonists of a universalistic society. By contrast, fewer than half of the respondents

from South Korea (26%), Venezuela (34%), Russia (42%) and Indonesia (47%) would

refuse to testify for a friend.

Empirically proven findings on cultural differentiation provide reasons for cultural

clashes within the business economy. Universalistic cultures depend on extensive and

detailed contracts as documents laying down rules for co-operation, whereas particu-

laristic cultures rely on the strength of personal relationships. They view detailed con-

tracts as a sign of mistrust and consequently they feel little need to abide by them.

Case study: the German won’t hire the Serb’s daughter

Mr. Rade, an engineer who had immigrated to Germany from the former Yugoslavia,

worked for a highly respected German engineering firm. His daughter Lana had re-

cently graduated from a prestigious German university. Mr. Rade wanted his German

boss to hire Lana. But the boss refused to have a father and daughter working in the

same office. Mr. Rade believed that his boss was acting unfairly. The boss lost respect

for Mr. Rade and Mr. Rade became so upset that he requested a transfer to a new

department. Neither Mr. Rade nor his boss understood that the conflict was caused by

fundamentally different values orientations in the two cultures.Source: Adler 2002: 29

As it has been shown, it is not easy for managers to know how to behave appropriately

in an unfamiliar culture. A field study carried out by Black and Gregersen (1999) re-

vealed that 10-20% of American managers sent to foreign countries cut short their pe-

riod of stay and almost 30% did not meet their company’s expectations. With “disturb-

ing” regularity bosses did not consider whether employees’ were open to foreign cus-

toms and traditions or understood the culturally specific way of doing business in the

foreign country. At least three types of competence are demanded from managers

when aiming to prevent conflicts between people from different cultures:

• The ability to accurately understand the parties’ real intentions, demanding, in turn,

detailed and precise knowledge of the cultures involved.

• The ability to “translate” between culturally different ways of expressing these in-

tentions, requiring a commonly understood “language” in which to mediate.

• The ability to guide leaders in their strategic decision-making about what to do with

each other; this raises the demand for an ethic that has universal validity.

127

B.8.3 Managing cross-cultural business ethics

Concerning the common thesis, that MNCs tend to become more universalistic as they

operate more globally, Adler (2002) observes that globally organised businesses are in

fact growing more similar, but peoples’ attitudes within companies are maintaining their

cultural uniqueness. She points out that employees and managers bring their cultural

background and ethnicity to the workplace. National culture explains 50% of differ-

ences in employees’ attitudes and behaviours, more than do professional role, age,

gender or race.

The cross-cultural challenge for ethics initiatives is thus not a challenge to Western

style of business ethics management in the sense that it is trying to displace ethics

programmes in favour of some other set of programmes. Rather, it is a question of

whether existing programmes are flexible enough to accommodate fully the needs of

non-Western peoples. At the same time, the challenge for non-Westerns (e.g. Asians)

is to position themselves in the discourse on universality, which many observers see

as originating in and largely shaped by Western experience.

Weaver (2001) explicates how the dimensions of culture discussed above can influ-

ence the effectiveness of common ethics initiatives (e.g. codes of conduct, ethics tele-

phone lines, ethics offices) and recommends the development and application of a

culture-structure contingency analysis with the task of encouraging ethical behaviour in

global businesses.

• The generally conciliatory, harmonising character of collectivistic cultures implies

that certain ethics initiatives (e.g. formal grievance committees, investigative offi-

cers, external auditors, etc.) can be problematic. Such adversarial and legalistic

devices highlight group disharmony and single out individuals for blame. Structures

like internal reporting devices (ethics hot-lines) might seem too impersonal and

contrary to established hierarchical relationships; (typically Western) systems of

reward and punishment may represent an adversarial or confrontational approach.

• Inasmuch as power remains with upper-echelon managers, ethics initiatives which,

in low-power distance fashion, focus on all organisational members will, in high

power distance cultures, seem culturally illegitimate and may result in hostility. In a

high power distance society, egalitarian ethics structures risk locating blame at the

wrong organisational level and may be perceived as efforts by elites to avoid re-

sponsibility for exercising their power.

• Generally, formal codes and review procedures are compatible with high uncer-

tainty avoidance culture, but Weaver considers critically the efficiency of anony-

mous reporting systems with their implied approach of ambiguous or unknown out-

comes in high uncertainty avoidance cultures. He points out how corporate codes,

ethics training, and ethics ombudspersons fail to do justice in the name of business

128

ethics in countries such as the Philippines. Business in the Philippines is charac-

terised by the tendency toward informal approaches to problems and by tendencies

to (re-)act purely on the basis of feeling.

• With reference to ethic initiatives Weaver suggests that punitive and regulatory

ethics management structures are desirable in masculine cultures, whilst affirma-

tory and non-punitive approaches in ethics programs will generate more legitimacy

in feminine cultures. Ethics management by non-punitive measures would likely be

viewed as an end in itself, compatible with a feminine culture’s stress on care, hu-

man relationships and quality of life. This leads to the consideration that companies

in masculine cultures may need to do more to raise awareness of ethical issues as

compared to e.g. Swedish or Norwegian companies.

• The effectiveness of particular ethics management practices depends on their

communication context. Explicit formalisms, like written documents as published

codes of conduct, etc. will be legitimated and better understood in low-context cul-

tures, whilst in high-context cultures, codes and other formal procedures may be

culturally irrelevant or seen as arrogant.

• In this way, as ethics initiatives allow lower-level employees to challenge the deci-

sion of superiors, they violate the norms of those cultures in which managers are

assumed to be experts. In these settings ethics reporting systems will not likely be

used and will risk organisational illegitimacy. Under these conditions Weaver sug-

gests focussing on “expert” managers themselves, and to abstain from ethical de-

cision-making modes from more “low power distance” situations.

129

B.8.4. UNESCO’s regulation on cultural diversity

In 2001, the UNESCO’s governing body – the General Conference – committed itself

to the full implementation of the Universal Declaration on Cultural Diversity.11 The

Declaration recognises safeguarding cultural pluralism as a central issue of “new eth-

ics” and cultural rights as an integral part of human rights. Within the action plan for the

implementation of the Declaration, the UNESCO foresees, among other things, main

lines to encourage digital literacy and to ensure greater mastery of the new information

and communication technologies, as well as promotion of linguistic diversity in cyber-

space and encouragement of universal access through the global network to all infor-

mation in the public domain. The principles of the UNESCO’S Declaration on Cultural

Diversity are along the lines of:

Identity, diversity and pluralism

• Cultural diversity is the common heritage of humanity and should be recognised

and affirmed for the benefit of present and future generations.

• Policy expression respecting the reality of cultural diversity is essential to ensure

harmonious interaction among people and groups with plural, varied and dynamic

cultural identities.

• Cultural diversity is one of the roots of economic growth, but it also is a

means of achieving a more satisfactory intellectual, emotional, moral and

spiritual existence.

Cultural diversity and human rights

- The defence of cultural diversity implies a commitment to human rights and funda-

mental freedoms, which are universal, indivisible and interdependent.

- As defined in article 27 of the Universal Declaration of Human rights, all persons

have the right to express themselves and to create and disseminate their work in

the language of their choice, and particularly in their mother tongue; and all per-

sons are entitled to quality and training that fully respect their cultural identity.

- Freedom of expression, media pluralism, multilingualism, equal access to art and

to scientific and technological knowledge, including in digital forms, are the guar-

antees of cultural diversity.

Cultural diversity and creativity

• Cultural heritage as the wellspring of creativity must be preserved, enhanced and

handed on to future generations.

11 www.unesco.org/confgen/press_rel/ 021101_clt_diversity.shtml.

130

• Cultural goods and services must be treated as commodities of a unique kind.

• Cultural policies must function as catalysts of creativity.

B.8.5 Some formulat ions from existing codes of conduct

British Telecom – Better World, Our Commitment to Society/Employees:

In our view, you cannot be a successful global business, competing in the fiercely

global market, if the way you do business is based on a single set of cultural values.

The key to success is a recognition of the power of cultural, linguistic and behavioural

diversity. [...] Diversity training is a core part of BT’s training portfolio ... the modules

currently include combating harassment and bullying and understanding cultural diver-

sity.

BASF – Value Statement:

Intercultural Competence: We foster intercultural diversity within the BASF Group and

work together as a team. Intercultural competence is our advantage in global competi-

tion.

Principles: We seek employees from all cultures and nationalities who possess the

appropriate skills and competencies and are willing to devote their energies to meet

our objectives and to support our values. We recruit our future leaders from all affiliates

and promote preferably from within BASF. We do not tolerate discrimination based on

nationality, gender, religion or any other personal characteristics.

131

B.9 Corporate citizenship with a focus on the digital divide

Businesses play a major role in the economic, social and cultural development of in-

dustrialised and developing countries alike. They create jobs, pay taxes, large compa-

nies support an immense number of SMEs in the value chain, and companies’ contri-

butions to education, social services, or civic and cultural development are of increas-

ing importance. While, on the one hand, positive effects of companies’ activities on

societal development may be seen only as spin-offs, on the other hand it should be

obvious that MNCs in particular have the responsibility of reflecting on how to support

socio-economic progress in any country of operation.

The following pages are not intended to give a detailed picture concerning the activities

of companies toward societal development in all areas of interest. Instead, we refer to

one specific aspect of companies’ responsibility in the context of global e-work, namely

their contribution toward reducing the digital divide gap between industrialised and de-

veloping countries.

B.9.1 General aspects of corporate citizenship

The term “corporate citizenship” describes the role of business in society. Whilst NGOs

tend to stress “corporate responsibility”, leading companies themselves are inclined to

prefer the term “citizenship” because of its implied balance between rights and respon-

sibilities. According to the Corporate Citizenship Company (a UK-based research and

consulting organisation) the term “corporate citizenship” refers among other things to

“the voluntary contributions made by a company to community development around

the world”. Therefore, a key part of any corporate social responsibility programme is a

focus on involvement within the local community – either directly or via partnerships

with community or voluntary sector organisations. Three basic types of voluntary con-

tributions that companies offer to societies around the world can be identified.

Table B.9.1: Types of activity toward corporate cit izenship

Type of activity and m otive Examples Outcomes for the bus iness

Charitable gifts aimed at

promoting the common good

Corporate philanthropic dona-

tions and support for employees

volunteering and contributing

Measurable benefits to the

business are rarely sought but

a reputation is established for

being a “caring company”

“Community investment” from

community budgets aimed at

a few areas of interest to the

company and designed to

Support for local anti-crime

initiatives, education and train-

ing, or local health provision to

benefit employees, their families

The returns to the business

are measurable in some de-

gree by an improved physical

or social environment in which

132

protect and promote its long-

term interests

and the wider community to do business and a better

pool of potential employees

Commercial initiatives to

achieve a wide range of

business goals and promote

brands, supported from busi-

ness budgets such as mar-

keting, HR and research

Cause-related marketing, sup-

port for research in universities

and supplier development

Returns to the business are

measurable in terms of in-

creased share or access to

new ideas and the most highly

qualified employees and sup-

pliers

Source: Corporate Citizenship Company (s.a.: 10)

Ben Cohen, founder of Ben and Jerry’s Homemade Ice Cream, brings his self-

understanding of CSR concisely to the point: “Businesses tend to exploit communities

and their workers, and that wasn’t the way I thought the game should be played. I

thought it should be the opposite – that business had a responsibility to give back to

the community, that is because the business is allowed to be there in the first place,

the business ought to support the community. What we’re finding is that when you

support the community, the community supports you back” (quoted in: mhc interna-

tional, news item, Nov. 2000).

One example of community investment with regard to domestic economic impacts is

the numerous activities of British Telecom (see also B.9.4 below).

Case study: BT economics

At both ends of its supply chain BT affects local economics. In our main operations we

have sought to place activities in areas of high unemployment – for commercial as well

as social reasons. For example, we have:

• worked with government agencies to place call centres in Northern Ireland,

Scotland and the South Wales valleys

• supported training centres as part of the Government’s New Deal programmes,

building skills for the disabled and long-term unemployed

• established the BT eLocations initiative that provides inward investors with a com-

bined site search and communications package

• brought telecentres and e-business opportunities to rural communities.Source: BT – From Globalisation to Localisation

B.9.2 Digital divide and initiatives for digital inclusion

The following section is about how MNCs can contribute toward reducing the digital

divide and hence toward socio-economic progress in countries of operation.

The uneven diffusion of technology is nothing new. OECD (2001b) defines the digital

divide as the gap between individuals, households, businesses and geographic areas

133

at different socio-economic levels with regard to their use of the Internet for a wide va-

riety of activities. Generally speaking, ICT disparities exacerbate existing disparities

based on location (such as urban-rural), gender, ethnicity, physical disability, age, in-

come levels, and especially between “rich” and “poor” countries. Given the importance

of ICT in economic development, a lack of access to knowledge and information may

deny countries the benefits of economic prosperity. Factors like absence of IT infra-

structure, high costs, high illiteracy, and limited knowledge of English language, make

access to new technologies difficult in developing countries.

Across the world, the digital divide is where new ICT meet existing socio-economic

inequalities. The volume of statistics is impressive and persuasive: There are more

telephone lines in London or Manhattan than in all of Africa; half of the world’s popula-

tion has never made a telephone call, much less accessed the Internet. One in two

Americans is online, compared with only one in 250 Africans. In Bangladesh a com-

puter costs the equivalent of eight years’ average pay.

The UN Human Development Report 2001 shows figures for the extent of the digital

divide:

• OECD countries contain 79% of the world’s Internet users (as a percentage of the

population, 54.3 in US whilst 0.4 in Sub-Saharan Africa or South Asia), and 95.6%

of all Internet hosts are located in OECD countries.

• In OECD countries there is more than one mainline telephone connection for every

two people, but just one for every 200 in the least developed countries.

• Also ICT costs vary enormous among countries and are particularly high in devel-

oping countries: e.g. monthly Internet access charges amount to 1.2% of average

monthly income for a typical US user, compared with 614% in Madagascar, 278%

in Nepal, 191% in Bangladesh and 60% in Sri Lanka.

• Concerning the penetration rate of Internet hosts, the OECD (2001b: 13) says that

in OECD countries there are 81.5 Internet hosts for every 1,000 inhabitants but

only 0.85 per 1,000 inhabitants outside the OECD area.

A common assumption is that people in less developed regions or countries gain ac-

cess to technological innovations once they have more income. Following this reason-

ing, economic growth first creates opportunities for useful innovation. But the reverse

process has also been commonly observed; in fact, the digital economy has made un-

precedented gains in advancing human development, while the means for eradicating

poverty have come largely from technological breakthroughs.

What is clear is that the disparities between the “information rich” and “information

poor” is growing, and the potential impact on society – whether good or bad – will be

accentuated by technology. All countries, even the poorest, are increasing their access

134

to and use of ICT. Yet “information rich” countries are increasing their access and use

at such an exponential rate that, in effect, the divide between countries is actually

growing. Within countries, all groups, even the poorest, are also increasing their ac-

cess to and use of ICT. But within countries the “information rich” are increasing ac-

cess and use at such an exponential rate that, in effect, the division within countries is

also actually growing (cf. www.bridges.org).

The digital divide is a complicated patchwork of varying levels of ICT access, basic ICT

usage, and ICT applications among countries and peoples. Addressing the digital di-

vide requires the integration of

• development of systems that can be used collectively, such as tele-centres;

• development of IT competence through training and education;

• abolition of telecom monopolies;

• promotion of specific programmes that support the combination of public and pri-

vate networks; and

• development and use of innovative software that can be better used in a specific

country or regional context.12

None of this is likely to come together without a massive injection of resources and

creativity.

Requested activities to reduce the digital divide gap

Bridges.org (an international non-profit organisation with a mission to help people in

developing countries using ICT) analysed a large selection of on-the-ground initiatives

aiming at bridging the digital divide and set forth the following issues which are the

determining factors in whether or not people have “real access” to technology.

12 Deutsche Stiftung für internationale Entwicklung: The Policy Dialogue on Digital Inclusion; source: http://www.dse.de/ef/digital/ (17-05-2002)

135

Table B.9.2 What is Real Access?

Physical

access

Is there physical access to technology? People will only use technology if it is

available within a reasonable distance from their home or work. A computer

that lacks adequate power supply, connection (Internet capabilities), and

software will not be effective in helping people see the relevance of technol-

ogy to their lives.

Capacity Do people understand how to use technology and its potential use? People

must be able to effectively use the technology. Furthermore, it is essential

that people understand the broader potential for technology applications, so

users can be empowered to creatively apply the technology to other parts of

their life.

Afford ability Is technology affordable enough for people to use? The costs of hardware,

phone lines, electricity, Internet connections, software, and maintenance are

that expensive that this excludes many people and organisations from using

technology.

Trust Do people have confidence in and understand the implications of the tech-

nology they use, for instance in terms of privacy, security, or cyber-crime?

Relevant

content

Is there locally relevant content in the local languages? Content is only rele-

vant when its substance is interesting to users given their cultural back-

ground, and accessible given their reading, writing and language skills.

Integration Does the technology further burden people’s lives or does it integrate into

daily routines?

Socio-cultural

factors

Are people limited in their use of technology based on gender, race, or other

socio-cultural factors? People are often excluded from using technology

based on ethnic, gender, or other socio-culturally-based inequalities. These

factors must be considered and addressed.

Appropriate

technology

What is the appropriate technology that meets the needs and desires of peo-

ple? A wide variety of technologies are available. Policy makers and users

must be able to critically assess which kind of technology is appropriate for

the intended use.

Local

Economic

env ironment

Is there a local economy that can sustain its use? The local economic situa-

tion will determine the level and frequency of technology use. Technology

that can be used to foster economic growth will foster use in the community.

Legal and

regulatory

framework

Do laws and policies foster technology use? What changes are needed to

create an environment that does?

Macro-

economic

env ironment

Is national economic policy conducive to widespread technology use, for

example in terms of transparency, deregulation, investment, and labour is-

sues?

Political will Is there political will in the government to do what is needed to enable the

integration of technology throughout society?

Source: Bridges.org (2001:73)

136

The researchers of bridges.org found out, that many initiatives address specific as-

pects within the range of issues, but too often they neglect related factors that limit

their success. For example, too many tele-centres providing computers and connec-

tions in rural locations do not become self-sustaining because local people do not use

the services – often they fail to address the role of the centre in the local economy or

the need for locally relevant content. There is a need for a holistic approach to cover

the range of issues to create effective and sustainable uses for technology that are

integrated into local society. “It is a lack of investment in human capital, not a lack of

investment in physical capital, that prevents poor countries from catching up with rich

ones. Educational attainment and public spending on education are correlated posi-

tively to economic growth” (Barro and Sala-i-Martin, cited in: ILO 2001, 201).

Table B.9.3: Which aspects of access do current ini tiatives address?

Source: Bridges.org 2001:74

Contributions of companies to reduce the digital divide

The uneven diffusion of ICT – the digital divide – has caught the attention of many

leading companies worldwide. There are many companies that set out to achieve digi-

tal inclusion. This is a challenging task, given the complexity and uncertainty of the

137

interaction between information technology and economic growth in a period of rapid

technology change.

In less industrialised countries or regions with deficiencies in access to ICT, commu-

nity-based learning initiatives to promote digital literacy and usability are considered as

solutions for reducing the digital divide. Observations from many corporate social re-

ports reveal that companies are functioning more and more as sponsors of such com-

munity-based training initiatives and are showing their responsibility for empowering

the low-income communities.

A more appropriate approach for many companies, both to reducing the ICT shortage

and including the digitally excluded in countries of operation, is to focus on public-

private partnerships for skills development. Nokia has been building up ICT training

institutes in China and South Africa (the South African Development Programmes) and

Cisco Systems is active in the promotion of education and training as a means of nar-

rowing the digital divide (ILO 2001: 240). The PITB-Oracle initiative demonstrates the

dramatic impact that a focused effort on strengthening IT training can make. This part-

nership with the second largest software company in the world was an important step

in the effort to position Pakistan on the global IT map.

Case study: Punjab Information Technology Board (PITB) – Oracle initi ative

In March 1999 PITB negotiated with the Oracle corporation to commit $13.5 million in

terms of free software and courseware to launch the Oracle Academic Initiative in the

province. The objective of the initiative was to develop the capacity of a set of partner

educational institutions to prepare students to become Oracle Certified Professionals

(OCPs), one of three skills for which a global shortage existed. An 8-month PITB Cer-

tificate Programme in Oracle Database Management was launched in ten educational

institutions in September 1999. Programme quality was closely monitored by PITB,

which selected the current study body of about 300 from a pool of 4000 applicants

through a competitive examination.

Collaborative effort between academic institutions, government and industry resulted in

an analysis of user requirements together with prototype systems. In less than twelve

months the initiative received outstanding success. In December 1999, the Director of

the Oracle Corporation reviewed the progress of the partnership, and as a result an-

nounced that Oracle would increase its investment in Punjab to $20 Million, at the

same time announcing a unique fee discount on the certification tests for students par-

ticipating in the programme. By August 1999, 200 students hat attained various levels

of Oracle Certification and Pakistan had climbed to third place (after USA and Canada)

globally in terms of number of new OCPs being certified. The Oracle Corporation de-

scribed the PITB initiative as a “global best practice” case in considering the top ten

students for international placement.

138

Source: Andrew Bibby, background paper prepared for the ILO World Employment Report

2001, available on the CD-ROM version.

When asked, “what should be expected of companies” in bridging the digital divide,

British Telecom13 defines the responsibility of companies as following: “Companies

have been the leading innovators in the development of ICTs. Their emphasis, how-

ever, has been on enabling technologies. While these are crucially important for ad-

dressing universal access and even to some extent change-making content, they don’t

tend to have the potential for deep e-capability, the critical gateway for addressing the

long-term challenges underpinning the digital divide. Companies have an enormous

potential, through the weight of their financial resources, but also in the case of ICTs

through products and expertise, to facilitate deep e-capability through learning proc-

esses. (...) Partnerships are really able to create multiplier effects because of the

coming together of different parties and their relevant expertise. (...) Finally and most

importantly, companies must transparently commit themselves to addressing the digital

divide within their core business strategies as well as through community investment.

Best practice will come when there is a blurring of the lines between the two, thereby

creating the win-win scenario of CSR. Commitments come in many forms, one notable

however is from the top – that CEOs make stands on the issue and influence relevant

parties to do likewise, both externally and internally. Another is the transparent and

accountable setting of targets for continuous improvement both for business and social

development.”

An example of partnerships, as suggested by BT, is the cross-border “digital partner-

ship”, established by leading companies and the World Bank, in which companies find

imaginative ways to integrate technology, telephone connections, training and Internet

access. The mission is to mobilise the immense problem-solving capability of people in

business, make use of the vast IT resources they dispose of and provide access to

content that can do something practical about levels of literacy among the poor.

Case study: digital partnership

It has been estimated that in the OECD countries about 600 million PCs will be de-

commissioned in the next five years. The value to companies concerned is generally

less than $50 per PC and effective disposal is becoming increasingly costly for compa-

nies as managers have to observe stricter environmental regulations. But these PCs

are worth something to poorer countries and their value would be immeasurably

greater if they were part of a sustainable programme. A group of pilot companies that

includes ABB and Diageo is helping develop a cost-neutral economic model that could

become part of a blueprint for recycling technology for use in the developing world. The

13 BT (2001): The Digital Divide. Better World – Our Commitment to Society. www.groupbt.com/Betterworld/PDF/digital_short.pdf (23-05-2002)

139

Digital Partnership intends to bring together companies that can offer hardware and

software, telecommunications links, training and content to develop a plan for deploy-

ing these services in the community. Pilot programmes are being planned for South

Africa with the National Business Initiative and other countries can follow.Source: Financial Times, May 3 2001.

Case study: Breaking barriers to Internet access

The World Wide Web is too expensive for millions of people in developing countries,

partly because of the cost of computers that are the standard entry point to the Web: in

January 2001 the cheapest Pentium III computer was $700 – hardly affordable for low-

income community access points. Further, the text-based interface of the Internet puts

it out of reach for illiterate people. To overcome these barriers, academics at the Indian

Institute of Science and Engineers at the Bangalore-based design company Encore

Software designed a handheld Internet appliance for less than $200. Based on the

Linux open source operating system, the first version of the Simputer will provide Inter-

net and email access in local languages with touch-screen functions and micro-

banking applications. Future versions promise speech recognition and text-to-speech

software for illiterate users. The intellectual property rights have been transferred for

free to the non-profit Simputer Trust, which is licensing the technology to manufactur-

ers at a nominal fee – and the device is soon to be launched.Source: PC World 200; Simputer Trust 2000; Kirkman 2001, cited in: UN Human Development

Report 2001

Another good example of digital inclusion is HP’s approach, in its aim to broaden ac-

cess having the potential to create value.

Case study: The Joko Project

The Joko Project – born of a partnership involving HP, Sontal (Senegal’s predominant

telecommunications provider) and world-renowned musician Youssou N’Dour – is pro-

viding Internet connectivity, training and locally initiated solutions to connect Senegal

with the world.

• “Joko Clubs” make Internet usage economically available for the first time in rural

and urban Senegal

• “Joko Stations” in Europe and America will link expatriate communities to families

and friends back home

• Services include e-mail, affordable telephony, education for both students and

teachers, weather reports, crop prices, vocational training, e-jobs, counselling, fi-

nancing and telemedicine.

“The best sign of success is the eagerness and excitement of the communities we’re

involved with,” says HP e-Inclusion Manager Bernhard Virondreau.Source: http://www.hp.com/e-inclusion/en/project/joko.html

140


Caux Round Table’s Principle 2 :

The Economic and Social Impact of Business: Towards Innovation, Justice and World

Community: “Businesses established in foreign countries to develop, produce or sell

should also contribute to the social advancement of those countries by creating pro-

ductive employment and helping to raise the purchasing power of their citizens. Busi-

nesses also should contribute to human rights, education, welfare, and vitalisation of

the countries in which they operate.”

ING, Business Principles:

Wherever ING operates, it recognises that good relations with its local communities are

fundamental to its long-term success. The Group’s community relations policy is

founded upon mutual respect and active partnership, aimed at sustaining lasting and

trusting relationships between the group’s operations and local communities.

141

B.10 Core labour standards with focus on coll ective barga ining

In the world of intensifying competition that both globalisation and ICT have created,

the need for decent labour standards has become acutely important. Without them the

potential risks of the information economy could prevail over the advantages. The 1995

World Summit for Social Development addressed the social dimension of globalisation

for the first time at the highest political level. The participating countries recognised that

globalisation is too often accompanied by unemployment, poverty and social disinte-

gration.

Due to the fact that flexible capital markets more and more elude national spheres of

influence, MNCs are able to move production sites at short notice, producing in areas

where the best overall conditions are found at the moment. While, on the one hand, the

labour markets in high-wage countries are being threatened by competition from low-

wage countries, the global race for the best locations for doing business most often

results in disadvantages for workers in southern-hemisphere nations, since adequate

labour laws rarely have been instituted in developing countries.

• A total of 10% of the value of goods traded internationally are produced under con-

ditions violating basic labour rights. Child labour has come to entail some 250 mil-

lion children worldwide.

• Across the globe, labour union activities are increasingly being suppressed.

• Each year approx. 2 million people the world over die as a direct consequence of

their working activities, and about 12,000 of these are children (ILO, 16th World

Congress on Health and Safety at Work).

• In China there are several hundred export-processing zones. Worldwide these

zones employ 27 million people. In most countries national labour legislation does

not apply to export-processing zones (OECD Observer, Oct. 2000).

Against the backdrop of this situation, international organisations and multilateral sys-

tems are assuming vital significance as points of reference for defining basic labour

rights. These international instruments reflect an important canon of values which is

fundamental for understanding codes of conduct as well as for the demands of those

participating in the discussion of such codes.

In the preceding chapters, special topics related to e-work in the context of the global

knowledge-based economy have been treated. While basic labour rights lie at the core

of any definition of employee’ rights, issues such as forced labour or child labour are

hardly relevant for the target group of white-collar workers whom the global code for e-

work addresses. Particularly in developing countries, knowledge workers more often

belong to a privileged caste of employees. Basic labour rights are, nevertheless, of

central importance for working conditions in the knowledge society. The present chap-

142

ter, therefore, discusses fundamental worker rights such as collective bargaining and

the right to form unions, rights which even many employees in industrial countries do

not take for granted. Thus, this chapter looks at examples of basic labour standards in

general and of union rights in particular on the international level which may be consid-

ered for globally applicable labour regulations.

B.10.1 Union rights - the first social pillar of the global economy

Even in industrial nations, global competition is reinforcing the tendency to push labour

standards down to a low level. The documentary film entitled “Secrets of Silicon Val-

ley”, for instance, portrays the extremely bad working conditions prevailing to a certain

extent in Silicon Valley14. A far cry from e-hype and millions in venture capital, thou-

sands of plain workers in the tech-delta grind away at their jobs for petty wages. Com-

panies working under contract to well-known firms the likes of Hewlett-Packard and

Cisco pay their warehouse staffs, packers and fork-lift drivers little more than $US 6.50

an hour. In Silicon Valley, with its ghastly living costs, wages like these are only

enough to live at a subsistence level. One of the protagonists in this movie is Raj Jay-

adev, a temp-worker from India. Raj Jayadev is hired by Manpower Inc., one of the

world’s largest temporary employment agencies, to assemble Hewlett-Packard printers

in a San Jose factory. When his paycheque is shorted, Raj successfully brings together

workers to protest. Yet, when he raises safety and health issues, he is laid off for “stir-

ring up trouble”. According to more than a hundred interviews done for the documenta-

tion, Raj Jayadev’s case is not unique. “It is common for companies in Silicon Valley to

contract to temporary employment agencies in order to be able to manage staff as

‘flexibly’ as possible – which means being able to lay off hundreds of workers within

minutes. Similarly, Jayadev’s employer was not Hewlett-Packard but rather Manpower.

Hewlett-Packard even denies maintaining factories here. Yet, the factory where Jay-

adev packed HP printers is located on HP property, while the building and security staff

all belong to HP.” 15

In the light of telework, temporary employment and employment insecurity, the right to

trade unions and to collective bargaining are generally taking on a more central role.

Unions historically have been strong voices for equality in access to technology, and

they can push the government and private sector towards easing the digital divide and

making sound labour policies. The World Bank's World Development Report 1995,

"Workers in an integrating world"16 refers to the economic role of unions: “Trade union

activities can be conducive to higher efficiency and productivity. Unions provide their

14 Secrets of Silicon Valley Study Guide, http://www.secretsofsiliconvalley.org/studyguide.pdf (14-06-2002)

15 Spiegel Online, May 18, 2001, http://www.spiegel.de/netzwelt/netzkultur/0,1518,134610,00.html

16 ILO, http://www.ilo.org/public/english/standards/norm/whyneed/dev.htm (14-06-2002)

143

members with important services. At the plant level, unions provide workers with a

collective voice. By balancing the power relationship between workers and manage-

ment, unions limit employer behaviour that is arbitrary, exploitative, or retaliatory. By

establishing grievance and arbitration procedures, unions reduce turnover and promote

stability in the work force - conditions which, when combined with an overall improve-

ment in industrial relations, enhance workers' productivity.”

However, in the knowledge-based economy unions often have no easy time. The rea-

sons for low trade-union representation in the knowledge economy are manifold:

• Unlike the tayloristically organised production of goods, in the knowledge-based

economy companies must rely on their employees’ knowledge. Agreements on

objectives and accompanying evaluation have taken the place of observing per-

formance. In carrying through this management concept, it is often suggested that

employers and employees share the same interests. This gives way to the illusion

that unions or rights to collective decision-making and representation are superflu-

ous. According to a study done by the Austrian Institute for Empirical Social Re-

search (IFES, quoted in Mum 2002), two-thirds of all those interviewed working in

the “new economy” complain of a dearth of security provisions with respect to so-

cial situation and labour rights in their working contracts as well as a lack of rights

to participate in company decisions.

• A fundamental change of present-day collective bargaining comes from the trend

towards individualisation of the determination of terms and conditions of employ-

ment, which has been revealed in CSI interviews. Employers may see no reason to

do otherwise, particularly when their employees do not demonstrate active interest

in collective representation. They may see it as a way of rewarding individual merit

and skills, and in attracting high-quality recruits. Some human resource manage-

ment techniques may indeed encourage this approach as the most appropriate

way of promoting enterprise competitiveness. On the other hand, such individuali-

sation brings back into play the inherent inequality of the employment relationship

with the attendant risk of depressing terms and conditions of employment, as well

as opening the way to possible discriminatory or arbitrary treatment.

• Despite the shortage of skilled IT workers, among IT workers themselves there is

hardly any awareness of the need to collectively stand up for their rights. Indeed,

the profile of the typical ICT worker diverges in some respects from that of the tra-

ditional trade union member. For example, one interviewee, an employee repre-

sentative at an Austrian IT company, observed that a) the low rate of union mem-

bership and b) the self-attitude of being omnipotent among IT workers in general

lead to many individuals interpreting union support during collective bargaining and

144

for regulating other issues at the workplace as a sign of personal weakness and

thus to rejecting such support.

• Generally, conditions for employees in the knowledge-based economy are hetero-

geneous, displaying characteristics that make it difficult to organise workers ac-

cording to traditional union categories. The job of a call-centre agent, calling forth

associations with piece or assembly-line work, is substantially different from the

journalistic task of an online editor or the activities of an engineer in a telecommu-

nications company, a systems administrator within an insurance conglomerate or a

webmaster working for a publishing house. Yet some examples show that even

heterogeneous groups of knowledge workers are being reached by labour unions.

One such initiative is the “IT Worker Interest Group” founded by the Austrian Union

of Salaried Employees.

Case study: union interest group for IT workers

work@IT is an interest group for individuals working in the field of information and

communication technology. We are a grass-roots democratic, labour-union platform for

high-tech workers from all lines of business. Among our members are programmers,

technicians, authors and content providers, network administrators, developers, artists

and web designers, webmasters, software testers, project managers, customer service

representatives, telecommunications specialists, media observers and many more.

From employees to so-called atypically employed persons, such as work and service

contractors and contract workers, and to self-employed individuals with a trading li-

cense but no employees of their own, our members represent the diversity of the “new

economy”. Even those not belonging to a trade union can register without cost in order

to become better acquainted with our services. The work@IT interest group is a union

portal for IT employees to exchange experiences, communicate and network. We offer

you support in articulating and getting action on your concerns and demands within the

working world as well as on the policy-making level and in the media.Source: http://www.interesse.at/it/

145

B.10.2 Basic labour standards in voluntary codes of conduct

a) International Labour Organisation

The ILO has adopted more than 180 Conventions and 185 Recommendations referring

to labour standards. At the ILO’s 75th anniversary in June 1998, the adoption of the

Declaration on Fundamental Principles and Rights at Work was launched, obliging all

of the 175 member States, even those that have not ratified the relevant conventions,

to promote and realise the principles pertaining to the fundamental rights in the ILO

Convention, merely by virtue of their membership in the ILO. As was the case with all

other ILO instruments, governments, industrial associations and trade unions were

consulted during wording of the declaration. The core labour standards as identified by

the Copenhagen Summit are: 17

• Freedom of association (No.87) and the effective recognition of the right to

collective bargaining (No. 98)

• Elimination of all forms of forced or compulsory labour (No. 29 and No. 105)

• Elimination of discrimination in respect of employment and occupation (No. 111)

and gender specific remuneration (No. 100)

• Elimination of child labour (No. 182) and minimum age (No. 138).

Full text of “Freedom of Association and Protection of the Right to Organise

Convention”, 1948

Part I. Freedom of Association

• Article 1: Each Member of the International Labour Organisation for which this

Convention is in force undertakes to give effect to the following provisions.

• Article 2: Workers and employers, without distinction whatsoever, shall have the

right to establish and, subject only to the rules of the organisation concerned, to

join organisations of their own choosing without previous authorisation.

• Article 3: (1) Workers' and employers' organisations shall have the right to draw up

their constitutions and rules, to elect their representatives in full freedom, to organ-

ise their administration and activities and to formulate their programmes. (2) The

public authorities shall refrain from any interference which would restrict this right

or impede the lawful exercise thereof.

• Article 4: Workers' and employers' organisations shall not be liable to be dissolved

or suspended by administrative authority.

• Article 5: Workers' and employers' organisations shall have the right to establish

and join federations and confederations and any such organisation, federation or

confederation shall have the right to affiliate with international organisations of

workers and employers.

17 http://www.ilo.org/public/english/standards/index.htm

146

• Article 6: The provisions of Articles 2, 3 and 4 hereof apply to federations and con-

federations of workers' and employers' organisations.

• Article 7: The acquisition of legal personality by workers' and employers' organisa-

tions, federations and confederations shall not be made subject to conditions of

such a character as to restrict the application of the provisions of Articles 2, 3 and 4

hereof.

• Article 8: (1) In exercising the rights provided for in this Convention workers and

employers and their respective organisations, like other persons or organised col-

lectivities, shall respect the law of the land. (2) The law of the land shall not be

such as to impair, nor shall it be so applied as to impair, the guarantees provided

for in this Convention.

• Article 9: (1) The extent to which the guarantees provided for in this Convention

shall apply to the armed forces and the police shall be determined by national laws

or regulations. (2) In accordance with the principle set forth in paragraph 8 of article

19 of the Constitution of the International Labour Organisation the ratification of this

Convention by any Member shall not be deemed to affect any existing law, award,

custom or agreement in virtue of which members of the armed forces or the police

enjoy any right guaranteed by this Convention.

• Article 10: In this Convention the term organisation means any organisation of

workers or of employers for furthering and defending the interests of workers or of

employers.

Part II. Protection of the Right to Organise

- Article 11: Each Member of the International Labour Organisation for which this

Convention is in force undertakes to take all necessary and appropriate measures

to ensure that workers and employers may exercise freely the right to organise.

Full text of “Right to Organise and Collective Bargaining Convention”, 1949

- Article 1: (1) Workers shall enjoy adequate protection against acts of anti-union

discrimination in respect of their employment. (2) Such protection shall apply more

particularly in respect of acts calculated to — (a) make the employment of a worker

subject to the condition that he shall not join a union or shall relinquish trade union

membership; (b) cause the dismissal of or otherwise prejudice a worker by reason

of union membership or because of participation in union activities outside working

hours or, with the consent of the employer, within working hours.

- Article 2: (1) Workers' and employers' organisations shall enjoy adequate protec-

tion against any acts of interference by each other or each other's agents or mem-

bers in their establishment, functioning or administration. (2) In particular, acts

which are designed to promote the establishment of workers' organisations under

the domination of employers or employers' organisations, or to support workers' or-

ganisations by financial or other means, with the object of placing such organisa-

147

tions under the control of employers or employers' organisations, shall be deemed

to constitute acts of interference within the meaning of this Article.

- Article 3: Machinery appropriate to national conditions shall be established, where

necessary, for the purpose of ensuring respect for the right to organise as defined

in the preceding Articles.

- Article 4: Measures appropriate to national conditions shall be taken, where neces-

sary, to encourage and promote the full development and utilisation of machinery

for voluntary negotiation between employers or employers' organisations and

workers' organisations, with a view to the regulation of terms and conditions of em-

ployment by means of collective agreements.

For promoting core labour standards ILO seeks to assist the efforts made by members

through

a) supervisory mechanism: members have to present a report on steps taken to im-

plement the conventions regularly every two to five years. Complaints can be initi-

ated by ILO members, including employers’ and workers’ organisations, and can

lead to the establishment of a Commission of Inquiry with the purpose of carrying

out recommendations.

b) A yearly reporting requirement by which non-ratifying countries have to indicate the

steps they have taken to promote the principles of the fundamental conventions.

Employer and worker groups can provide comments on the national reports.

c) In the case of violations the ILO favours, instead of sanctions, technical assistance

encompassing advice on legislative reform, capacity-building of regulators and ad-

ministrators and training government officials, to strengthen the capacity of the tri-

partite constituents (cf. Eva Dessewffy, presentation at a symposium on April 25

and 26, 2002, Linz, Austria).

b) OECD Guidelines for Multinational Enterprises

Adopted in June 2000 by the OECD Ministers, the OECD Guidelines for Multinational

Enterprises also contains provisions on work and employment. Although not binding,

they are supported by OECD member governments of countries from which most

MNCs originate. The Guidelines provide voluntary principles and standards for respon-

sible business conduct in fields of employment, industrial relations, human rights, envi-

ronment, information disclosure, competition, taxation, and science and technology.

With respect to social issues, the Guidelines are in line with the fundamental ILO con-

ventions. Among the comprehensive recommendations for putting the principles into

practice are found the suggestions to: translate the principles into individual national

languages; make them available through the Internet and, above all, draw investors’

attention to them; and nurture the dialogue with employers’ associations, trade unions

and NGOs. Not adhering to the principles potentially implies that government agencies

148

will take action. In cases when the principles are violated, National Contact Points

serves as mediators between the parties to a conflict.

Full text of the OECD Guidelines for Multinational Enterprises referring to union

rights 18

IV. Employment and Industrial Relations; Enterprises should...

1. a) Respect the right of their employees to be represented by trade unions and

other bona fide representatives of employees, and engage in constructive

negotiations, either individually or through employers’ associations, with such

representatives with a view to reaching agreements on employment conditions.

2. a) Provide facilities to employee representatives as may be necessary to assist in

the development of effective agreements. b) Provide information to employee

representatives which is needed for meaningful negotiations on conditions of

employment. c) Promote consultation and co-operation between employers and

employees and their representatives on matters of mutual concern.

3. Provide information to employees and their representatives which enables them to

obtain a true and fair view of the performance of the entity or, where appropriate,

the enterprise as a whole.

5. In their operations, to the greatest extent practicable, employ local personnel and

provide training with a view to improving skill levels, in co-operation with employee

representatives and, where appropriate, relevant governmental authorities.

6. In considering changes in their operations which would have major effects upon the

livelihood of their employees, in particular in the case of the closure of an entity

involving collective lay-offs or dismissals, provide reasonable notice of such

changes to representatives of their employees, and, where appropriate, to the

relevant governmental authorities, and co-operate with the employee

representatives and appropriate governmental authorities so as to mitigate to the

maximum extent practicable adverse effects. (...)

7 . In the context of bona fide negotiations with representatives of employees on

conditions of employment, or while employees are exercising a right to organise,

not threaten to transfer the whole or part of an operating unit from the country

concerned nor transfer employees from the enterprises’ component entities in other

countries in order to influence unfairly those negotiations or to hinder the exercise

of a right to organise.

8. Enable authorised representatives of their employees to negotiate on collective

bargaining or labour-management relations issues and allow the parties to consult

on matters of mutual concern with representatives of management who are

authorised to take decisions on these matters.

18 http://www.oecd.org/pdf/M000015000/M00015419.pdf

149

c) UN Global Compact

Basic labour rights are explicitly mentioned in a more binding charter, the United Na-

tions Human Rights Convention. The initiative UN Global Compact launched by busi-

ness, labour and civil society in June 2000 promotes and applies nine voluntary princi-

ples derived from international instruments to advance human rights, labour and envi-

ronmental standards. This is a voluntary initiative aiming to serve as a “value-based

platform designed to promote institutional learning”.

In the field of labour, enterprises are asked to “demonstrate global leadership by up-

holding the values that lie at the heart of decent work. These principles help build con-

structive relations in the workplace and the community, as well as create more stable

investments. Enterprises will realise benefits in terms of productivity, improved reputa-

tions and co-operative working environments, all of which can improve the bottom line”

(Commission of the European Communities 2001: 10). “Several hundred” companies

have already committed themselves to internalising the Global Compact.

Full text of UN Global Compact, Principle 3: freedom of association and the ef -

fective recognition of the right to collective bargaining 19

Establishing and joining organisations are essential aspects of freedom of association.

The principle applied in the workplace means that both workers and employers can

establish and join organisations to represent their interests. These organisations are

free to affiliate with national and international counterparts. Activities involved in estab-

lishing and joining organisations include drawing up constitutions and rules, selecting

representatives in full freedom, organising administration and activities, and formulat-

ing programmes. Bargaining collectively on conditions of work is key to effective func-

tioning of the relationship between workers and their organisations, and employers

and/or their organisations, and is the expression in practice of freedom of association

in the world of work. Recognising, on both sides of the table, the duty to bargain in

good faith and make every effort to come to an agreement builds trust and productive

workplace relations. An integral component of this principle involves industrial action by

workers and their organisations to promote and defend their economic and social in-

terests.

d) WTO

At Singapore in December 1996, WTO members renewed their commitment to the

observance of internationally recognised core labour standards. The WTO Ministerial

Conference in Doha, Qatar on November 14, 2001 expressly commissioned the mem-

ber states with including the issue of trans-national employment into negotiations.

19 http://www.unglobalcompact.org/

150

e) European Commission

Since the early years of the European Community, respect for labour standards is a

substantial element of Community legislation, ranging from standards on health and

safety to equal opportunities and non-discrimination at work. At the Nice Council in

December 2000, the EU endorsed a social policy agenda which promotes the concept

of quality in employment, in industrial relations, and in working conditions. The ILO’s

eight fundamental conventions have been ratified by all EU Member States. Due to the

growing importance of adapting working conditions to the new economy and the need

for greater coherence and transparency with regard to private initiatives like codes of

conduct and social labels, the EC launched a Green Paper on promoting a European

framework for Corporate Social Responsibility in July 2001.20

As a reaction to differences among the voluntary codes of conducts and because a

means of external verification has been lacking, two other instruments worthy of men-

tion have been developed: SA 8000 und the Global Reporting Initiative.

f) SA 8000

Social Accountability International (SAI), founded in 1997 as the Council on Economic

Priorities Accreditation Agency (CEPAA), has developed standards for independently

auditing to what degree companies adhere to codes. The SA8000 norm consists of

various social standards, relevant for employment, which human rights experts con-

sider integral to social auditing.

Full text of the SA8000 norm concerning “Freedom of Association and Collective

Bargaining ”21

• 4.1 The company shall respect the right of all personnel to form and join trade un-

ions of their choice and to bargain collectively.

• 4.2 The company shall, in those situations in which the right to freedom of associa-

tion and collective bargaining are restricted under law, facilitate parallel means of

independent and free association and bargaining for all such personnel.

• 4.3 The company shall ensure that representatives of such personnel are not the

subject of discrimination and that such representatives have access to their mem-

bers in the workplace.

20 http://europa.eu.int/comm/employment_social/soc-dial/csr/greenpaper.htm (10-05-2002)

21 http://www.cepaa.org/

151

g) Global Reporting Initiative

Based on the triple bottom line for harmonising companies’ reporting principles, the

Global Reporting Initiative (GRI) also relies on high standards for social reporting in the

area of labour standards.

Full text of the GRI concerning to reported contents referring to “Freedom of

Association ”22

• 6.82 Staff forums and grievance procedures in place – percentage of facilities and

countries of operation.

• 6.83 Number and types of legal actions concerning anti-union practices.

• 6.84 Organisational responses to organising at non-union facilities or subsidiaries.

22 http://www.globalreporting.org/GRIGuidelines/

152

Comparison of voluntary codes of conduct

Comparing the approaches to social regulation of labour standards mentioned above,

the following table provides an overview of the different areas of regulation covered by

the individual initiatives.

Table B.10.1 Comparison of volunt ary codes of conduct

��X� ��C�� ¡�¢ £¥¤X¦0¢� £¥§©¨X¦XªL« ¬t¯®,°?°L°±¡�² �

³�´ µX¶ £¸·Pª?£ ¶¸¹º�»X¼ ½P¾L¿ÁÀ?ÂÄÃÅ ½LÆ ÇLÈP¼ Æ ¾�ÈÉ

Ê�È,Ë�»�Ì�Ì�È¾LÇPÀ?¿�Æ »L¾ É

Í ÀL¼ ½LÈPÎÏLÀ É È�ÇÐ ¼ ÀL¿ Ñ=»LÂÁÌ

º�»X¼ ½L¾�¿�ÀLÂÃÉ ¿�À�¾?ÇLÀPÂÄÇ

º�»X¼ ½P¾L¿ÁÀLÂÁÃÉ ¿ÁÀL¾PÇLÀPÂ�Ç

Å È�»?ÒLÂÁÀ ÐLÓ Æ Ë�À,¼Ë�» Í ÈQÂ�ÀLÒPÈ Å ¼ »PÏLÀP¼

Ô Ó ÈLÂÁÈ?È Í ÈÂLÕ×Ö8Ø�ÙÚ¸Æ ÂIÌ É» Ð È?ÂÄÀ7¿�È Å ¼ »PÏLÀP¼ Å ¼ »LÏPÀL¼ Å ¼ »LÏ�À?¼

Û ÈXË�¿�»�Â�ÀL¼@Ë�» Í ÈQÂ�ÀLÒPÈ Ü�¼ ¼ Ü�¼ ¼ Ü�¼ ¼ Ü�¼ ¼ Ü�¼ ¼Ê�È É�Ð Â È É ÈL¾,¿�ÀL¿ÁÆ »P¾ÝÆ ¾©¿ Ó ÈË�»LÇ,È5ÞÛ ¿JÀL¿ÁÈ É Ã�È É Ã�È É Ã�È É ¾L» ÃuÈ ÉÔs»LÂ ß�È�Â É Ã�È É Ã�È É à Ã�È É ÃuÈ Éá Å Õ É ¾L» ¾L» à Ã�È É ÃuÈ Éâ ¾PÇL½ É ¿IÂ�Ã Ã�È É ¾L» Ã�È É Ã�È É ÃuÈ Éâ ¾PÇLÈ Ð ÈL¾PÇLÈP¾L¿Ì�»}¾7Æ ¿Á»?Â�Æ ¾LÒ ¾L» ¾L»

Â�ÈLË�»,Ì�Ì�È7¾ÇLÈPÇ Ã�È É

ÂÄÈ7Ëu»PÌ�Ì�È7¾ÇLÈPÇ

Ê�È�ÑxÈPÂ É ¿�»ãâ äLÕåË�»�ÂÄÈË�»L¾ Í È�¾L¿ÁÆ »P¾ É Ã�È É ¾L» Ã�È É Ã�È É ÃuÈ Éæ�È,ÀL¼ ¿ Ó�çèÉ À�ÑxÈP¿�Ã Ã�È É ¾L» Ã�È É Ã�È É ÃuÈ Éá�»8Ñ-»?Â�Ë�ÈLÇ�¼ ÀLÏ�»?½LÂ Ã�È É ¾L» Ã�È É Ã�È É ÃuÈ Éæ�»,½LÂ É »,ÑPéê»,Â�ß Ã�È É ¾L» à Ã�È É àë�Æ ¾,Æ ÌV½LÌìÀ?ÒLÈ Ã�È É ¾L» Ã�È É Ã�È É ÃuÈ ÉÔsÀLÒuÈ Éîí ï ¼ Æ Í Æ ¾LÒPð Ã�È É ¾L» Ã�È Éiï Ã�È É�ï ÃuÈ ÉÚ¸Â;È�ÈLÇP»?Ìñ»,ÑÀ É�É »QË�Æ À,¿�Æ »P¾ Ã�È É Ã�È É Ã�È É Ã�È É ÃuÈ ÉØ�»,¼ ¼ È�Ë�¿IÆ Í È�ÏLÀPÂÄÒ7À?Æ ¾PÆ ¾LÒ Ã�È É Ã�È É Ã�È É Ã�È É ÃuÈ Éá�»&ÇPÆ É ËiÂÄÆ Ì�Æ ¾,ÀL¿ÁÆ »L¾ Ã�È É Ã�È É Ã�È É Ã�È É ÃuÈ ÉÖtòX½LÀP¼7Â�ÈLÌV½L¾PÈLÂÁÀ?¿�Æ »L¾ Ã�È É ¾L» Ã�È É Ã�È É ÃuÈ É

Source: Pearson and Seyfang (2001), compliments of CSI

B.10.3 The role of trade unions with respect to codes of conduct

Codes of conduct should be based on conventions and principles of international or-

ganisations, “involving social partners and those in developing countries covered by

them”, in order to improve labour standards on an international level (European Com-

153

mission 2001b, Green paper on CSR). But many companies adopt codes of conduct

without involving trade unions in any way. The findings of the OECD review on codes

of conduct (OECD 2000: 13) show that only 30% of the 246 voluntary codes investi-

gated mention respecting freedom of association and collective bargaining.

Also Benjamin, in her capacity as executive director of Global Exchange (USA), criti-

cises that the original goal of codes, namely protecting workers in countries of opera-

tions, are hardly ever realised efficiently in practice. “In the South many workers’ rights

groups see codes as a justification for not doing anything substantive, as a smoke

screen. They think codes have never been disseminated in a serious way to workers

and that often they are not just meaningless, but actually harmful because they give

companies cover.” (Carnegie Council on Ethics and International Affairs, 2000, Series

2 No. 4) From her experiences in visiting many firms around the world she addresses

criticism toward private companies codes, stating that many codes do not include free-

dom of association, nor does even one workplace code call for minimum wages cov-

ering living costs or prohibit gender discrimination.

154

Figure B. 10.1 Voice r egulat ion and repr esentational secur ity

Source: ILO Report I (B), 2000: 20

The low density of trade union organisation in many countries makes it unrealistic to

insisting that codes must always be negotiated with trade unions. The international

scope of the codes within the globalised economy makes it questionable whether it is

either practicable or appropriate for national trade unions to seek to negotiate codes

with international scope. Instead of becoming a party to a signed agreement, trade

unions can:

• avoid complications by seeking to advise companies on appropriate code content

and implementation;

155

• insure that the link between exploitation and abuse of workers on the one hand,

and the oppression of workers on the other, is understood and reflected in the

code;

• take the central role in implementation and verification of codes on a permanent

basis; no one process scheme and audit scheme are as effective as observations

made by workers’ representatives during daily working life (interview with Eva An-

gerler, GPA)

Although in some countries trade unions are underrepresented or even prohibited,

companies have nevertheless opportunities for establishing participative forms of

elected consultative committees. Trade union experience23 shows that, even under

dictatorship, workers have been able to create or enlarge the space for trade union

organising and collective bargaining with some employers. This was the experience in

Chile, Korea, Poland, South Africa and Turkey while these countries were dictator-

ships. Companies respecting human rights should therefore be alert to the possibilities

of creating and enlarging the space for workers’ self-organisation. “Worker

empowerment is and always has been the most enduring way to end poverty and cor-

rect abusive workplace conditions. (...) To empower workers we must open space for

workers to organise democratic unions, independent of government or employer domi-

nant. The right to form unions is not simply one of many codes that need to be sought:

It is the primary one ” (Banks 2000:12)


Svenska Handelsbanken, Social responsibility at Handelsbanken:

Handelsbanken does not conduct business with any country on The Observer's Hu-

man Rights Index, that is, those countries that have the worst record in the area of hu-

man rights according to Amnesty International.

Working conditions and union rights: Handelsbanken complies with the laws and

agreements on working hours in each country. In the Nordic countries, where 95% of

the Bank's employees work, Handelsbanken adheres to the collective bargaining

agreements which clearly regulate working hours, overtime, rest periods, breaks and

vacations. The Handelsbanken Group has established a fixed set of employee rights

throughout the Group, such as minimum wage. Child labour is not accepted at Han-

delsbanken. All employees in the Handelsbanken Group have the right to organise and

join a union. Employees are represented in the central Board of Directors through the

profit-sharing foundation Oktogonen. Employee representatives are also found on the

Boards of Directors of the regional banks. At Handelsbanken, all individuals with the

23 International Confederation of Free Trade Unions.

http://www.icftu.org/displaydocument.asp?Index=991209382&Language=EN (13-06-2002)

156

same competence have the same right to employment, promotion, salary and profes-

sional development regardless of gender, age, ethnic background or sexual orienta-

tion.

Nokia, code of conduct:

Human Rights: Nokia will respect and promote human rights. Nokia recognizes, with

the international community, that certain human rights should be considered funda-

mental and universal, based on accepted international laws and practices, such as

those of the United Nations’ Universal Declaration of Human Rights, International La-

bour Organization and Global Compact principles. Among those rights that Nokia

views as fundamental and universal are: freedom from any discrimination based on

race, colour, sex, language, religion, political or other opinion, national or social origin,

property birth, age, or other status; freedom from arbitrary detention, execution or tor-

ture; freedom of peaceful assembly and association; freedom of thought, conscience

and religion; and freedom of opinion and expression. Nokia will not use child or forced

labor, or tolerate working conditions or treatment that is in conflict with international

laws and practices.

157

L I S T O F I N T E R V I E W S

With experts

Eva Angerler, Co-Worker of Department for Work and Technique at the Private Em-

ployees’ Trade Union (GPA), Austria

Bernhard Feuling, Chair of Work Council at Freudenberg Group, Germany

Christian Frey, Certified Project Manager at Austrian Airlines, Austria

Liselotte Griesmayer–Lopez, Managing Director at Christian Solidarity International

/CSI, Austria

Paul Kolm, Department Manager for Work and Technique at the Private Employees’

Trade Union (GPA), Austria

Martina Molnar, Managing Director at humanware, Austria

Michaela Reeh, CSR at OMV

With e-workers

Herbert Aigner, System LI-OS at Siemens AG, Austria

Dominque Feugier, Staff Member at UNIDO, Austria

Erwin Kößldorfer, Software Development at Siemens AG, Austria

Rolf Nagel, Member of Work Council at Siemens AG, Austria

Peter Neschen, Information Technology&Networking at Siemens AG, Austria

Robert Sabaj, Department Manager at PSE- International, Slovakia

158

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